Improved electronics output grows Singapore’s industrial production by 2.5% in Q3

Pharmaceutical is trying to recover.

Singapore’s industrial production growth figure due today will be an added boost to a healthy 3Q14 GDP growth reported yesterday.

DBS expects headline industrial output to report an expansion of 2.5% YoY. This is a reversal from a drop of 1.2% previously.

According to DBS, output from key electronics cluster has improved marginally over the last couple of months. While performance from this industry is expected to remain weighed down by the structural shift within the cluster, the cyclical trend does suggest a certain degree of improvement

Separately, the pharmaceutical cluster dipped into an industry specific slump last month. Key pharmaceutical manufacturing plants shut down temporarily to facilitate the usual sterilisation process before a change in product mixes. Such phenomenon is synonymous with the “lumpy” output level of the industry. And chance is high than production activities will resume back to the norm in October.

Here’s more from DBS:

An expected improvement in industrial production is also reaffirmed by the recent October PMI data. Overall manufacturing PMI was up by a healthy 1.4pts to 51.9 in October. Electronics PMI was also higher, by 0.6 to 52.5 in the month. 

In fact, electronics PMI not only breached past the 52 level, it clocked the highest reading since Feb11. So, hopefully that will translate into better industrial output growth for the month.