Why you should not be alarmed by the easing of industrial output

It will still surpass last year’s 3.6% growth.

Singapore's industrial output growth decelerated 6.7% in April, pulled mainly by the output from the biomedical manufacturing and domestic oriented industries.

However, RHB believes that this should not sound an alarm, as the output has been expanding strongly since late last year and the low base effect has already faded.

"We maintain our forecast for manufacturing output to grow 4% in 2017, compared to 3.6% last year," the brokerage firm said.

RHB noted that the projected growth will be underpinned by the overall higher semiconductor production whose demand is set to pick up again in the second half of the year ahead of the new iPhone launch.

More so, the firming US economic growth and the receding risk of an EU break-up could reignite global capex cycle and therefore supporting machinery projects.

The improving global outlook would also likely to lead the rising demand for petrochemicals and oil & gas production.