Manufacturing growth expected to pick up in Q4 2024, led by electronics

In July, output grew by 1.8% YoY.

Experts foresee more substantial sequential growth in the manufacturing sector, particularly in electronics, from Q4 2024 to 2025, after July's robust industrial production figures.

UOB suggests this growth is likely if major central banks in advanced economies lower policy rates, spurring investment and consumption.

"Furthermore, the eventual replenishment of inventory and the ongoing replacement of worn-out or outdated consumer electronics acquired during the pandemic are positive tailwinds for the electronics segment," UOB said.

The electronics segment output rose 2.8% YoY in July.

The positive outlook on the electronics sector, alongside, bright spots in specific industries, and the the stronger-than-expected July IP performance are among the reasons why RHB anticipate Singapore's manufacturing and trade-related sectors will contribute to overall growth in 2H24.

"We observe bright spots in specific industries: electronics, precision engineering, and transport engineering in for the remainder of the year. Empirically, these industries are plugged into the global trade landscape and will continue to benefit from the uptick in global E&E demand and trade activities." RHB said.

"It is important to note these sectors such as transport engineering—particularly marine and offshore engineering—general manufacturing, and electronics segments including computer peripherals, info-comms, and other electronic modules continued to show annual growth. This expansion reflects ongoing recovery in major economies like the US and China. As such, we look for Singapore's industrial production growth momentum to recover into 2H24 on the back of an improved global backdrop," RHB added.

For the full year, RHB and UOB experts predict IP print to grow by 1.0%