Singapore output rebounds but late-year drag expected

Industrial production rose 5.3% MoM seasonally adjusted in April, reversing two months of contraction in March and February.

Singapore’s industrial production rebounded sharply in April, lifted by electronics and aerospace output, as firms continued to front-load exports amidst ongoing trade uncertainties.

The latest data signals resilience in the near term, though economists caution of potential drag in the second half of the year.

According to a macroeconomic note released by UOB Global Economics & Markets Research on Monday, industrial production (IP) rose by 5.3% MoM seasonally adjusted in April, reversing two months of contraction in March and February.

On a YoY basis, IP grew by 5.9%, well above the Bloomberg consensus of 2.5%, though below UOB’s internal estimate of 10.1%.

“The strength in IP was largely driven by a meaningful sequential rebound in electronics,” UOB noted. Electronics output jumped 9.7% MoM sa and 15.2% YoY, with semiconductors and consumer electronics leading the gains.

Transport engineering also showed a solid increase of 9.1% MoM sa and 22.9% YoY, attributed to maintenance, repair, and overhaul (MRO) activities in aerospace.

In contrast, the pharmaceutical segment contracted sharply, falling 42.1% MoM sa and 1.6% YoY. “There is limited evidence of front-loading in the pharma component,” UOB stated, citing the inelastic nature of pharma demand and ongoing discussions around securing zero tariffs for Singapore's pharma exports to the US.

The report attributed part of the April rebound to front-loading strategies by exporters in anticipation of higher tariffs.

“The current pause on reciprocal tariffs and (temporary) truce on US-China trade tensions opens a window for continued front-loading,” UOB wrote.

The bank also pointed to risks from potential US Section 232 tariffs on semiconductors and pharmaceuticals, and a recent threat by US President Donald Trump to impose 50% tariffs on EU imports.

However, UOB cautioned that this short-term strength may be followed by a slowdown. “There are likely to be some payback effects from front-loading that could result in an even more protracted downturn in trade and manufacturing activity in late 2H25 and into 1H26.”

In light of recent data, UOB has slightly revised Singapore’s 2025 growth forecast up to 1.7% (from 1.5%), but trimmed its 2026 projection to 1.4% (from 1.6%), anticipating that the boost from early exports may wane.