Singapore’s industrial production (IP) experienced a robust 4.7% month-on-month seasonally adjusted increase in March, alongside a 10.1% year-on-year rise, according to UOB Global Economics and Markets Research. This growth surpasses the previous month’s decline of 1.2% and 3.3% respectively. The first quarter of 2026 saw manufacturing growth at 7.9% year-on-year, exceeding the advance estimates of 5.0%, suggesting a potential upward revision of the GDP growth to approximately 5.2% from the earlier 4.6%.
The electronics sector led the charge with a 5.7% monthly increase, bolstered by strong semiconductor demand linked to artificial intelligence (AI) advancements. Precision engineering also surged by 21.8%, driven by increased production of optical instruments and semiconductor equipment. Pharmaceuticals saw a 14.4% monthly rise, although they fell 17.9% year-on-year due to high base effects.
However, the petrochemical sector faced significant challenges, with a 23.9% monthly decline attributed to disruptions in feedstock supply. This was compounded by ongoing issues in the Strait of Hormuz, affecting supply chains and leading some companies to declare force majeure.
Despite these headwinds, UOB’s report suggests that the overall industrial production could remain resilient, supported by the electronics and semiconductor sectors. “Headwinds in the petrochemicals segment could intensify in the months ahead,” the report notes, but AI-related demand is expected to provide a cushion for the broader industrial landscape.
