SINGAPORE (June 26): Singapore’s factory output snapped out of the green with a 7.4% year-on-year contraction in May, following a broad-based contraction in almost all clusters. The dip comes despite a continued surge in biomedical manufacturing, which has been on an uptrend since the Covid-19 pandemic broke out.

Excluding the biomedical cluster, output plummeted 10.4%, according to data released by the Singapore Economic Development Board (EDB), a government agency under the Ministry of Trade and Industry (MTI).

Interestingly, the decline in May’s factory output bucked the 7.7% expansion tipped by analysts in a Bloomberg poll. However, the latest data marks the republic’s worst year-on-year performance on record since 1983. It also surpasses the 1.1% contraction registered in February, which had previously been named the biggest fall. 

On a seasonally adjusted month-on-month basis, manufacturing output dipped 6.2% - a significant deviation from the 3.6% expansion registered in April. Excluding biomedical manufacturing, May’s output was down 16.5%.

The 5.9% expansion in biomedical manufacturing output lifted the metric’s performance in May. Albeit narrower than the growth registered previously, this follows 14.7% higher production of active pharmaceutical ingredients and biological products. 

The cluster’s performance was however dampened by a 20.1% drop in its medical technology segment.

The decline in factory output was heralded by a 40.7% drop in transport engineering. This comes from a 30.1% decline in the aerospace segment, following the grounding of aircrafts due to restrictions in international travel.

The cluster was further weighed by a 55.1% fall in the marine & offshore engineering segment as work in the shipyards slowed down during the circuit breaker.

General manufacturing followed suit, widening its decline to 26.2% amid softer export demand and scaled down production. The dip was led by miscellaneous industries (-41.6%), printing (-38.2%) and food, beverage and tobacco (-14.3%).

Similarly, chemicals output plummeted to 13.5%, as all segments logged declines, the EDB pointed out. The petrochemicals and petroleum segments saw the biggest losses of 10.7% and 19.0% respectively, due to weak demand and plant maintenance shutdowns. 

The specialities and other chemicals segments also suffered from the Covid-19 outbreak, recording contractions of 12.2% and 21.8% respectively.

Meanwhile, precision engineering reversed into the red, as output declined 5.3%. This comes on the back of a 23.0% fall in output of precision modules and components – which took a hit from disrupted operations locally and in key export markets. 

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