Singapore's manufacturing sector is unlikely to get any better: analyst

Unless services sector edges up by 2%.

According to CIMB, the persistent weakness of both tech and biomed manufacturing pulled 2M13 MPI down to -8.6% yoy vs. a smaller decline of -0.2% yoy in 4Q12 and -1.1% yoy in 1Q12.

"Unless we see a very remarkable rebound in drug output in March, we expect overall manufacturing to remain a drag on overall 1Q13 GDP growth," CIMB said.

Assuming the service sector grows at a faster clip in 4Q12 (2% yoy vs. 4Q12’s +1.7%), due to stronger finance & insurance and business service sector growth,
advance 1Q13 GDP growth could come in at about 0.5% yoy (4Q12 GDP: +1.5%), outside the lower-end of the government’s 2013 growth target of 1-3%.

Here's more from CIMB:

While that is nothing to shout about, Singapore likely managed to squeeze in another quarter of sequential growth of about 3.5% qoq annualised (+3.3% qoq in 4Q11) because of the stronger service sector growth.

Barring another external shock, we expect Singapore’s growth momentum to pick up pace in 2H13 (and help by a less demanding base) to support our full-year GDP growth estimate of about 3%.

The government will release preliminary 1Q13 GDP data before the middle of April.

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