Singapore: Outlook for the manufacturing sector remains healthy – UOB

Economist at UOB Group Barnabas Gan assesses the latest Industrial Production figures in Singapore.

Key Takeaways

“Industrial production expanded 2.0% y/y (-10.7% m/m sa) in Jan 2022, disappointing market estimates for a significantly stronger growth of 11.6% y/y (+0.4% m/m sa). Excluding biomedical manufacturing, industrial production rose 4.7% y/y.”

“Fresh geopolitical risks amid the new waves of COVID-19 infections due to Omicron variant are the key drags to an otherwise rosy backdrop. We observe that Singapore’s trade exposure to Russia remains limited. Separately, the Omicron variant has been anecdotally less severe compared to Delta.”

“In all, our outlook is for full-year manufacturing to grow by an average of 4.0% in 2022. This suggests that despite the high-base growth rate seen in 2021, global trade activity is expected to stay buoyant in the new year.”