Singapore’s industrial production (IP) experienced a notable increase in January, rising 9.1% year-on-year (YoY), according to a report by UOB Global Economics and Markets Research. This growth was primarily driven by a significant surge in semiconductor and pharmaceutical outputs, which rose by 17.9% YoY and 33.6% YoY respectively. The January figures mark a recovery from a revised 5.4% YoY contraction in December.
The report highlights the potential for biomedical output to grow in 2025, following three consecutive years of contraction. This anticipated growth is attributed to Singapore’s continued success in attracting high-quality investments in the biopharma, medical technology, and precision medicine sectors, as noted in the Economic Development Board’s Year 2024 review.
Despite the positive start to 2025, UOB cautions that the manufacturing sector may face challenges in the latter half of the year. The report suggests that the initial benefits of front-loading production in anticipation of tariff escalations might be offset by less favourable base effects, potentially leading to weaker year-on-year IP readings in the second half of 2025.
Furthermore, the electronics export cycle in South Korea and Taiwan, which serves as a regional indicator, peaked in the third quarter of 2024. UOB believes that Singapore’s electronics non-oil domestic exports (NODX) growth similarly peaked in late 2024, although further data is needed to confirm this trend.
In summary, whilst Singapore’s industrial production shows promising growth at the start of 2025, potential challenges loom as the year progresses, particularly in the electronics sector.
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