Singapore’s industrial production (IP) experienced a significant rise in April, increasing by 5.8% month-on-month seasonally adjusted (m/m sa) and 17.6% year-on-year (y/y), according to UOB Global Economics and Markets Research. This growth exceeded Bloomberg’s estimates of 1.9% m/m sa and 12.0% y/y, largely due to robust demand for semiconductors, which saw a 12.9% m/m sa increase.
The transport engineering sector also contributed to the positive figures, with a 10.2% m/m sa rise, driven by marine and offshore engineering and aerospace gains. However, the precision engineering sector faced a slight decline of 3.5% m/m sa, whilst biomedical output weakened, with pharmaceuticals and medical technology experiencing sharp monthly declines.
Despite these gains, the ongoing conflict in the Middle East has negatively impacted the petrochemical sector. April’s data showed contractions in petrol and petrochemicals, with several Asian refineries cutting runs due to disruptions in the Strait of Hormuz.
UOB’s recent upgrade of Singapore’s 2026 GDP growth forecast to 3.2% from 2.5% reflects the strong industrial performance. The bank anticipates that AI-related tailwinds will continue to support growth in the second and possibly third quarters of 2026, offsetting the drag from energy and petrochemical supply disruptions. However, potential risks remain, particularly if critical semiconductor inputs face significant disruptions.
