Sparks fly: Singapore's wimpish electronics output to suffer 10 more gloomy months

No thanks to a recent plant shutdown.

Sparks are flying all over as Singapore's electronics cluster continue to struggle. Output has been grounded and has been shrinking for 2 months and a recovery story is still nowhere in sight.

According to DBS, the kind of doldrum see in May NODX is now being manifested in the headline industrial production index for the month as well.

Here's more from DBS:

We have expected things to deteriorate and they did. But the final outcome came in far worse than the most pessimistic forecast in the market.

Industrial output shrunk by 2.5% YoY in May14. On the margin, it plunged 5.7% MoM sa. The drag came from several areas. Firstly, all those one-off “boost factors” have dissipated. The offshore marine engineering cluster which surged 42.5% in March and lifted overall manufacturing is now grinding along at amodest 3.9% pace.

Key pharmaceutical cluster that has been expanding at an average 22% YoY per month over the last 3 months now saw its output dipped by 11.6%. 

Lastly, the slump in the electronics cluster continues. Output has now contracted for 2 consecutive months and this will likely remain the case for the next 10 months. Shutdown in one of the key semiconductor plants essentially means that the year-on-year growth figure for this cluster will remain in the red for the months ahead.

A pullback in GDP growth in the second quarter was expected. But given the underperformance in the manufacturing sector thus far, and considering its spillover effect on the service sector, as well as the constraint of the existing labour crunch, it seems likely that GDP growth in the second quarter will fare worse than previously anticipated.