Singapore’s industrial production (IP) experienced a remarkable surge of 26.3% month-on-month in September, marking the most significant sequential increase since January 2011, according to UOB Global Economics and Markets Research. This surge translated into a 16.1% year-on-year increase, surpassing all analyst estimates, which ranged from -6.5% to 9.0%.
The impressive performance in September was primarily driven by two sectors. Pharmaceuticals saw an extraordinary expansion of over 500% month-on-month, attributed to a sudden front-loading of orders from the US. This followed announcements by former US President Donald Trump to impose 100% tariffs on branded or patented pharmaceutical products unless manufactured in the US. Although the tariffs were initially set to take effect on 1 October, they have been delayed to allow negotiations for exemptions.
Additionally, the electronics sector recorded a 15.8% month-on-month rebound, led by semiconductors, which grew by 17.0%. This growth is believed to be fuelled by global demand for AI-driven investments, including data centre expansions and the integration of AI technologies into consumer devices.
The robust industrial production figures suggest a potential upward revision of Singapore’s Q3 2025 manufacturing growth to 5.0% year-on-year, compared to the initial estimate of 0.0%. Consequently, UOB has raised its full-year 2025 GDP forecast to 3.5% from the previous 3.2%, whilst maintaining the 2026 projection at 1.8%. The final Q3 GDP figures are expected to be released in late November.
