Singapore’s industrial production (IP) experienced a significant decline in February, contracting by 7.5% month-on-month seasonally adjusted, according to a report by UOB Global Economics and Markets Research. This decline translates to a 1.3% year-on-year decrease, falling short of Bloomberg’s median forecast of a 7.0% year-on-year increase and UOB’s own estimate of 9.5%.
The report highlights a notable downturn in electronics output, which fell by 6.4% year-on-year, primarily due to a drop in semiconductor production. Biomedical output also saw a decline of 14.3% year-on-year, attributed partly to unfavourable base effects, although this was somewhat offset by improvements in medical technology.
UOB’s analysis suggests that the industrial production slowdown could signal a moderation in Singapore’s GDP growth for the first quarter of 2025. The report notes that the electronics cycle in South Korea and Taiwan, which often serves as a regional indicator, peaked in the third quarter of 2024. This trend, coupled with escalating trade tensions and tariffs, could further depress manufacturing activity in the coming months.
The report also points out that the average industrial production for the last six months showed a noticeable slowdown, with electronics output dropping from 15.8% in January to 7.7% in February. Overall output also decreased from 9.2% in January to 5.7% in February, indicating potential fatigue from earlier production and export front-loading.
As trade tensions continue to rise, UOB warns that manufacturing activity could face further challenges due to weaker global demand, particularly in the second half of 2025.
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