RHB Bank has announced it will maintain its full-year industrial production (IP) forecast for Singapore at 7% for 2026. This decision is driven by expectations of continued strength in the electronics sector, which is set to benefit from a global technology upcycle and strong demand driven by artificial intelligence (AI). This trend is expected to bolster export growth and manufacturing activity in the near term, according to Barnabas Gan, Group Chief Economist and Head of Market Research at RHB Bank.
In May, Singapore’s IP grew by 13% year-on-year, although it experienced a slight month-on-month decline of 0.7% on a seasonally adjusted basis. This growth rate aligns closely with RHB’s forecast of a 13.6% year-on-year increase, despite a downward revision from April’s 16.5% rise.
Gan highlighted several key observations from the current IP data: the electronics and precision engineering sectors are likely to remain supported, whilst the biomedical engineering sector is expected to experience further softness in the second half of 2026. Additionally, there is a continuous moderation in the chemical cluster.
The report underscores the importance of the electronics sector in driving Singapore’s industrial production, as it continues to leverage global technological advancements and AI-driven demand. As these trends persist, they are expected to play a crucial role in sustaining Singapore’s manufacturing and export growth throughout the year.
