, Singapore
241 views
Photo by Clayton Cardinalli on Unsplash

Singapore's industrial production to contract by 7.0% in 2023

Expert says the manufacturing sector could remain downbeat for the rest of the year.

Given weak external demand and tight financial conditions stemming from an elevated interest rate environment, an expert from UOB believes that Singapore’s industrial production will contract by 7.0% in 2023.

UOB Senior Economist Alvin Liew said the manufacturing sector could remain downbeat “for the rest of 2023 and into early 2024.”

“The sub-50 reading for electronics PMI reaffirms the assessment that the electronics sector is likely to remain lackluster in the near term, even though the latest NODX and IP readings suggest that the electronics cycle has tentatively bottomed,” Liew said.

Liew, however, underscored that IP in regional electronics and/or semiconductor powerhouses like South Korea and Taiwan continue to see improvement.

“Both South Korea September IP and October exports turned expansionary for the first time since September  2022, with the IP expanding 3.0% YoY (August: -0.7% YoY) while exports surged to 5.1% YoY (September: -4.4%),” Liew said.

“The October S&P Global Manufacturing PMI survey for Taiwan saw an improvement to 47.6 (from 46.4 in September) although still materially below the 50- threshold. However, South Korea’s S&P Global Manufacturing PMI edged lower to 49.8 (from 49.9 in September), implying further caution on the outlook,” Liew added.

Whilst Liew expects Singapore’s IP print to contract by 7.0 in 2023, he underscored that there's a possibility that the contraction could be shallower. 

Meanwhile, UOB retained its 2023 GDP growth forecast at 0.6%, “broadly consistent with MTI’s official assessment that 2023 GDP growth would likely come in at the ‘lower half’ of the 0.5-1.5% range.”
 

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!