Singapore's industrial production to rebound 12.8%

Biomedical segment to lead the pack.

According to DBS, industrial production index (Mar13) is on tap today. And after the slump in February due to a combination offactors, production is expected to bounce back with a vengeance. 

DBS noted that headline YoY number is not going to be great but it’s the MoM sa figure that counts. A contraction of 3.1% YoY is expected due to the high base last year but the month-on-month figure will likely report a 12.8% surge.

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This essentially replicates the good showing in exports seen in the same month. Headline non-oil domestic exports were up by a solid 8% MoM sa in March and that has lifted the growth outlook a bit after a string of poor economic data in the first two months ofthe year.

Production activity in the electronics cluster will likely remain sluggish as it remains weighed down by the tepid global recovery process. However, this is likely to be offset by an expected rebound in the biomedical output.

The biomedical segment has just experienced two consecutive months of down-cycle due to the festive season lull and industry specific shutdowns. A strong ramp up in production typically follows after such down-cycle.

More importantly, a good outcome will surely bring about an upward revision in the GDP estimates forthe quarter. In fact, the question now is not whether it will or not, but by how much the GDP growth figures be revised.