Singapore’s manufacturing output grew 6.6 per cent in May from a year earlier, rebounding from a contraction of 0.2 per cent in April.
The increase is stronger than the 6.1 per cent forecast my many economists.
The gains were led by a surge in pharmaceuticals production, and robust growth in the transport engineering sector.
Excluding biomedical manufacturing, May output increased 2.0 per cent on-year, according to figures Tuesday from the Economic Development Board (EDB).
Compared to a month earlier, seasonally adjusted output rose 1.8 per cent in May, reversing a decline of 3.3 per cent in April.
Excluding pharmaceuticals, output grew 0.3 per cent on-month.
Output from transport engineering industries expanded 35.4 per cent year-on-year in May, with all segments recording higher output.
This was boosted by activity in oil-rig and ship building, which hoisted output from marine and offshore engineering by 44.0 per cent.
Economists note that the delivery of large manufactured items, such as a ship, may skew the total manufacturing output figures for the month.
Aerospace was also a strong contributor, with output up 23.2 per cent on-year in May, due to strong demand for engine repair jobs from commercial airlines.
Output of the transport engineering cluster in the first five months of 2012 increased 25.3 per cent compared to the same period in 2011.
Biomedical manufacturing output grew 32.8 per cent in May 2012 from a year earlier, and rose 16.3 per cent on a year-to-date basis.
Growth in the food, beverages, tobacco and miscellaneous industries helped bump-up output in the general manufacturing cluster, which grew 3.7 per cent on-year last month.
The food, beverages & tobacco segment saw higher production of concentrates for beverages and biscuits, while the miscellaneous industries benefited from higher demand for steel structural products and primary batteries.
UOB economist Alvin Liew forecasts low, single-digit manufacturing growth for the second quarter as a whole, and between 4 per cent and 5 per cent growth in gross domestic product.
“We’re still a bit cautious given that we’re two weeks into June already, so the thing is that we didn’t see a major fallout in Europe and while demand will be softer, there will still be some demand in the market itself,” he said.
The general manufacturing cluster’s output grew 2.8 per cent in May compared to the same period last year.
Meanwhile, the precision engineering cluster declined 0.4 per cent year-on-year, dragged down by a fall in the machinery and systems segment – down 3.0 per cent – which the EDB attributes to weaker demand for hoisting equipment and machine tools.
The chemicals cluster also declined 4.1 per cent year-on-year in May, with petrochemicals output contracting 1.3 per cent due to plant shutdowns for maintenance.
On a year-to-date basis, chemicals output declined 4.6 per cent, compared to the same period a year ago.
Output of the electronics cluster was 9.7 per cent lower in May compared to a year ago, with export demand for other electronics segments remaining weak.
The electronic modules and components and semiconductor segments contracted 12.1 per cent and 18.1 per cent respectively.
Alvin Liew, senior economist with United Overseas Bank, said: “We’re still a bit cautious given that we’re two weeks into June already. The thing is that we didn’t see a major fallout in Europe and therefore the softer demand, although its still going to be there, but there will still be some demand in the market itself.”
The output numbers come on the back of data earlier this month which showed Singapore’s export growth quickened in May.
The government expects the economy to grow between one per cent and three per cent this year.