Singapore Industrial Production Signals Strong Economic Recovery

By Amanda Lee and Fabiana Negrin Ochoa

Singapore's economy seems to be accelerating, with the latest strong industrial production data signaling a pickup in growth in the city-state.

Manufacturing output in the financial hub surged 21% in August from the same period a year ago, the Singapore Economic Development Board said on Thursday.

Excluding the volatile biomedical manufacturing segment, output increased 27.5%, according to data from the EDB, a government agency under the Ministry of Trade and Industry.

The data points to a solid third-quarter performance, prompting forecast upgrades among economists.

Maybank Research analysts now tip gross domestic product growth at 3.5% this year, up from 3% previously. That would compare with 1.1% last year.

August's manufacturing output print--the strongest since July 2021--suggests that GDP growth in the third-quarter will speed up to 4.3% from 2.9% in the second quarter, Chua Hak Bin and Brian Lee Shun Rong wrote in a report.

Barclays economist Brian Tan also thinks the data point to a pickup in growth for the July-September quarter, even with an unfavorable base effect. He tips on-year GDP growth at 4.2% for the period, implying a much stronger 2.2% on-quarter expansion.

In a note, Tan flagged upside risks to Barclays's 2024 GDP growth forecast of 2.5%, "potentially hitting or even exceeding the top of the Ministry of Trade and Industry's (MTI) 2.0%-3.0% range depending on extent of any manufacturing pullback in 4Q."

RHB Bank likewise sees scope to raise its full-year economic growth projection for Singapore due to the stronger-than-expected industrial output print, said acting group chief economist and head of market research Barnabas Gan.

RHB Bank upgraded its projection for full-year industrial output growth to 1.5% from 1.0%, Gan said in a report.

Expected improvements in major economies like China and the U.S. also bode well for the city-state's outlook, he added.

"As a trade-dependent economy, Singapore is well-positioned to benefit from a rosier global economic outlook."

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

September 26, 2024 07:06 ET (11:06 GMT)

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