Industrial production outlook improving as China, EU see some stabilization

Growth slowdown easing for both trading partners.

"Positive indications in Singapore’s two largest trading partners – China and EU – augurs well for IP trend for the next few months," said Maybank Kim Eng as Singapore's industrial production for August registered a 3.5% YoY increase.

China’s preliminary HSBC/Markit manufacturing PMI for Sep 2013 rose to a six-month high of 51.2 (Aug 2013: 50.1) while the EU’s manufacturing PMI expanded for a third consecutive month (Sep 2013: 51.1; Aug 2013: 51.4), which for Maybank, signals that China’s growth is stabilizing after the earlier slowdowns while the European economies are improving.

The stabilization is crucial for Singapore's industrial production to sustain its positive momentum given that China and the EU account for 13% and 11.5% of the country's NODX, respectively.