Singapore’s manufacturing output increased by 2.2% y-o-y in June, moderating from the 13.8% y-o-y growth seen in May. The growth is also the slowest seen since January and fell short of the 5.4% y-o-y growth estimate pencilled in by Bloomberg economists.
The lower output, which was due to declines seen in the biomedical manufacturing and chemicals clusters, did not surprise OCBC Bank's Selena Ling, who is its chief economist and head of treasury research & strategy.
"Gravity has finally caught up with the global electronics especially chip industry. Global manufacturing purchasing managers' index (PMIs) have pulled back of late. Anecdotally, even Apple is offering product discounts in China which is illustrative of the demand slowdown story. So it did not totally [come as a surprise] that Singapore’s industrial production also eased to 2.2% y-o-y in June," Ling says.