Industrial production may rise as RHB lifts forecast on sector momentum

The bank now sees a “material upside risk” to its earlier forecast of 0.5% growth in industrial production for 2025.

Singapore’s industrial sector may outperform expectations this year, with RHB Group revising its tone on manufacturing prospects amidst easing trade tensions and resilient electronics output.

The bank now sees a “material upside risk” to its earlier forecast of 0.5% growth in industrial production for 2025.

The change in outlook comes after a stronger-than-expected April showing. Industrial output climbed 5.9% YoY, well above Bloomberg’s 2.5% estimate, though slightly below March’s revised 6.8%.

Over the first four months of 2025, IP grew 4.7%, driven by robust gains in electronics and transport engineering.

Electronics remained the cornerstone of Singapore’s manufacturing strength. The sector expanded by 15.2% YoY in April, led by a 67.8% surge in infocomm and consumer electronics, and double-digit growth in semiconductors and data storage.

Transport engineering also posted strong results, jumping 22.9% on the back of a 39.5% rise in aerospace output.

Despite this momentum, RHB cautioned that Singapore’s outlook remains vulnerable. Global trade uncertainties, particularly around US tariff policies, and a softening global economy continue to cast a shadow.

Whilst exporters have benefited from a 90-day tariff pause, front-loading activity is seen as temporary, and the Ministry of Trade and Industry has maintained a cautious full-year GDP forecast of 0% to 2%.

Weakness in other key segments underscored the uneven recovery. Biomedical manufacturing contracted 1.1% YoY after a sharp spike in March, and chemical production remained in negative territory.

RHB noted that tariff exemptions on semiconductors and pharmaceuticals offer limited relief amid rising trade frictions and unstable demand.