Manufacturing sector's boom to slow down in 2H17

Will the electronics cluster save it again?

Singapore’s manufacturing sector saw explosive growth in the times of its rebound activity, but it may slow down for the rest of 2H2017, DBS Equity Research said in a report.

The sector is showing rebound in activity with the country’s purchasing managers’ index (PMI), although DBS noted it was slower than a month before.

Electronics, precision engineering, chemicals and biomedical, and manufacturing clusters all experienced output increase, whilst transport engineering and general manufacturing outputs contracted.

The improvement came from the jump in manufacturing activities, which may encourage future demand for industrial space if the sector maintains its positive growth for the rest of the year.

DBS Group Research head analysts Derek Tan and Mervin Song added, they expect that “the explosive growth from the manufacturing sector which is has been driven mainly by electronics cluster will likely taper off in 2H17, as seen by a general softening of the PMIs in the US, China and Singapore, implying that the growth in 2H17 will likely turn sideways.”