Article Written by : Trade Submit
Singapore’s manufacturing output grew by 1.9 % in the month of July, a figure much lower than the 8 percent growth experienced in June as compared to the same month in 2011 – and attributed to a weak start to the third quarter due to a technical recession.
Selena Ling, the head of Treasury Research & Strategy at OCBC Bank, sums it up, in saying, “Obviously, the main drag was electronics again. Offsetting this was the pharmaceutical, but overall, if you strip out pharmaceuticals, manufacturing growth would have been in a negative territory. So I think it does portend a weak start to the third quarter. We are not overly bearish at this stage about whether it would mean a technical recession for Singapore per se, because it is just one month’s data.”
Apart from the chemical and electronics sectors that pulled down output, according to this latest report, biomedical manufacturing and transport engineering expanded while precision engineering output experienced resurgence.
Yet it must be said that, according to the PMI numbers released by the euro zone, India and China, Singapore must keep in mind that ‘external demand conditions’ don’t look encouraging. Singapore’s economy, as is common knowledge, is a highly open economy that is dependent on exports, and usually tends to show up in production figures.
So, with the slowdown in manufacturing imminent, there is every chance that policy might be eased in the given circumstances, as a review is due to be conducted in October this year.
Economists predict that a government stimulus-led growth will occur at the end of the year but will not be as great as 2009 government stimulus.