Singapore’s industrial sector showed resilience in July 2025, with the Industrial Production Index (IPI) climbing 7.1% year-on-year, according to a report by CGS International. This growth, which outperformed Bloomberg’s forecast of 0.9%, was primarily propelled by the electronics cluster, which expanded by 13.1% year-on-year. However, the sector faces potential challenges due to impending US tariffs on semiconductor imports.
The electronics cluster, a significant contributor to the IPI, saw semiconductor production rise by 9.6% year-on-year, bolstered by global demand for chips used in artificial intelligence, data centres, and consumer electronics. Despite this growth, the announcement of 100% tariffs on chip imports by the US could impact future momentum. “We think it is too early to gauge the full impact until more clarity emerges on how the policy will be implemented,” the report noted.
Other sectors also contributed to the robust performance. The transport engineering cluster grew by 15.8% year-on-year, with the aerospace segment experiencing a 22.7% surge, driven by increased production of aircraft parts and maintenance demand from commercial airlines.
However, the general manufacturing sector contracted by 9.7% year-on-year, reflecting broader trade uncertainties. Singapore’s Manufacturing Purchasing Managers’ Index (PMI) dipped to 49.9 in July, indicating contraction, although the electronics PMI remained in expansion at 50.2.
Looking ahead, CGS International maintains its IPI forecast at 3.0% year-on-year for 2025, citing ongoing tariff uncertainties as a potential risk to the manufacturing outlook.
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