AI keeps Singapore factories firing

Electronics climbed 35.8% as chemicals, biomedical, and transport engineering weakened.

Singapore's manufacturing output rose 13.0% year-on-year (YoY) in May, driven by strong artificial intelligence-related demand that boosted electronics production, according to the Economic Development Board (EDB).

Excluding biomedical manufacturing, factory output increased 17.7% from a year earlier. On a seasonally adjusted month-on-month (MoM) basis, overall manufacturing output slipped 0.7%, whilst output excluding biomedical manufacturing rose 3.1%.

Within the manufacturing sector, electronics output rose 35.8% with the infocomms and consumer electronics segment expanding 59.2%, whilst semiconductors grew 37.0% on continued AI-related demand.

Precision engineering followed with a 32.2% increase, supported by higher production of semiconductor equipment, optical instruments, electronic connectors, and industrial tooling.

General manufacturing industries also grew 1.8%, driven by higher output of structural metal products, the EDB reported.

The remaining three manufacturing clusters contracted.

Transport engineering fell 5.0% as aerospace maintenance, repair and overhaul activity eased, alongside lower work on oil rigs and offshore platforms and softer demand for oil and gas field equipment.

Chemicals declined 11.5% due to lower petroleum and petrochemicals output following feedstock supply disruptions.

Biomedical manufacturing dropped 24.2%. Medical technology output weakened amidst softer demand for medical devices, whilst pharmaceutical output fell 41.6% because of lower biologics production and a different mix of active pharmaceutical ingredients.

From January to May, Singapore's manufacturing output increased 10.7% from a year earlier. Excluding biomedical manufacturing, output rose 15.2%.