May 25, 2018 / 7:13 AM / a year ago

Singapore April factory output up 9.1 percent on pharma upswing

SINGAPORE (Reuters) - Singapore’s industrial production in April grew more than expected, buoyed by an upswing in pharmaceuticals output, data showed on Friday, although the sector’s volatility and decline in electronics production growth clouded outlook.

Office workers walk to the train station during evening rush hour in the financial district of Singapore March 9, 2015. REUTERS/Edgar Su/Files

Manufacturing output in April rose 9.1 percent compared with a year earlier, up from the revised 6.1 percent rise in March, data from the Singapore Economic Development Board showed.

The median forecast in a Reuters survey was for an on-year 8.3 percent expansion.

On a month-on-month and seasonally adjusted basis, industrial production grew at a slower pace of 0.2 percent in April, lower than the revised 0.5 percent rise in March.

The poll called for a seasonally adjusted, month-on-month rise of 1.2 percent.

“This shows that factory output growth momentum is still maintained,” Jeff Ng, chief economist, Continuum Economics said.

“However, this may fade over time because of electronics and other sectors coming off a little,” Ng added.

The production rate in electronics sector – a driving force for Singapore economy last year – eased to 11.3 percent in April from a year earlier, compared with a 12.6 percent rise in March.

Pharmaceuticals production rate in April jumped 10.7 percent, accelerating sharply from the 7.2 percent contraction in March.

A pick-up in pharmaceuticals also helped offset five consecutive months of decline in electronics exports, leading to an unexpectedly sharp rise in exports year-on-year.

Analysts, however, are not too quick to cite these reasons for the growth of Singapore economy due to the volatility of the pharmaceuticals sector.

“Pharma continues to be the main support for now, not as much as electronics, but going forward, it could be the poorer-performing sector,” Ng said, adding that rising oil prices could mean better output performance for other lagging sectors such as marine and offshore engineering.

This comes a day after Singapore upgraded its growth forecast rate for 2018 to 2.5 percent-3.5 percent from 1.5 percent to 3.5 percent, helped by a resilience of factories and promising global demand.

Reporting by Fathin Ungku, Editing by Sherry Jacob-Phillips

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