Hopes fade for local manufacturing as factory output stumbles

Expect more pain in coming months.

The 5.4% year-on-year decline in Singapore’s headline industrial production in October paints a dire picture for the country’s manufacturing sector, according to a report by DBS.

The sobering figure means that industrial production has been declining for nine consecutive months, and spells trouble for the local economy despite better-than-expected 3Q15 GDP growth figures.

“There’s no need for champagne. This latest set of IP figures is the reality check and it hurts. This latest set of IPI numbers also provides a glimpse of what lies ahead in the coming months. All is not good in this regard. The global environment remains challenging. China is slowing and the US Fed is rushing to hike rates,” said DBS.

“The manufacturing sector is in recession. External competition, continued increase in business costs and manpower shortage are eroding the longer term prospects of the sector,” the report added.