Singapore’s industrial production (IP) experienced a notable rebound in April, rising by 5.3% month-on-month, seasonally adjusted, following two months of decline. This resurgence is attributed to front-loading in production and exports, according to UOB Global Economics and Markets Research. The year-on-year growth for April stood at 5.9%, surpassing Bloomberg’s consensus estimate of 2.5%, though it fell short of UOB’s own forecast of 10.1%.
The electronics sector played a significant role in this recovery, with a 9.7% month-on-month increase and a 15.2% rise year-on-year. This growth was largely driven by semiconductors and consumer electronics. Additionally, the transport engineering sector saw a 9.1% monthly increase, bolstered by maintenance, repair, and overhaul activities in the aerospace segment.
However, the pharmaceutical sector faced a decline, with a 42.1% drop month-on-month and a 1.6% decrease year-on-year. This was attributed to the generally price-inelastic nature of pharmaceutical demand and ongoing trade discussions with the US regarding potential tariffs.
Looking ahead, UOB anticipates that growth momentum in the second quarter of 2025 may continue to show resilience due to a temporary truce in US-China trade tensions. However, potential payback effects from front-loading could lead to a downturn in trade and manufacturing activity later in the year. Consequently, UOB has adjusted its 2025 growth forecast to 1.7% and lowered its 2026 projection to 1.4%.
“`
