Singapore's manufacturing output fell 13.2 percent in July from a year earlier, with production in the key electronics sector plummeting 32.7 percent, the government said yesterday.
It was the fourth month in a row that manufacturing output had fallen and reflected the continuing impact of the slowdown in the US economy and the slump in the global electronics sector, which have plunged the trade-driven economy into recession.
The rate of the fall was slower than the 16.2 percent plunge in June, the Economic Development Board said. Manufacturing output contracted 0.8 percent in April and 10.7 percent in May.
However, the decline in the output of the electronics sector deteriorated from 26.6 percent in June, which analysts said was a bad omen for the country's non-oil domestic export figures for August.
Non-oil exports plummeted by a record 24.2 percent in July from a year earlier and analysts were predicting a fall of up to 30 percent in August.
"Output of electronics slid further as the slump in global electronics demand persisted," the board said in a statement.
"All major segments were adversely affected as the lack of orders dampened output. The production of semiconductors declined as demand was weak and prices were lower than a year go," it said.
Output of computers fell on weak orders for home personal computers and servers from the US, it added. Output of the data storage segment also shrank due to low demand.
Production of printers and ink cartridges dropped as sales plunged, the board said.
Electronics account for about half of the manufacturing exports from Singapore, with the US as its largest market.
"The slump in worldwide semiconductor demand continued its negative impact on industrial production," the board said.
Cumulative output for the first seven months of this year declined 5.2 percent from the same period last year.
Pamela Wong, an economist with Standard and Poor MMS International, said the fall in the electronics output was worse than expected, although the overall decline in manufacturing output was not as bad as anticipated due to better performances from pharmaceuticals and chemicals. But she said "the outlook is still cloudy about when the electronics sector will see a turnaround."
Chia Woon-khien, an economist with ING Barings, said the slower rate of decline for the July overall output was just a "blip."
She maintained her forecast of a two to four percent year-on-year contraction in the GDP in the September quarter.
Production in the chemicals sector slipped 0.7 percent, with petroleum and petrochemicals, which grew 5.9 percent and 3.6 percent respectively, almost making up for a 5.7 percent drop in specialty chemicals.
Biomedical sciences output, which is being developed to provide diversification from electronics, surged 67.2 percent from a 1.1 percent fall in June.
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