In an encouraging development for Singapore's economy, the country experienced a 1.8% year-on-year increase in manufacturing output in July, showcasing resilience in a fluctuating market. Notably, when excluding the often-volatile biomedical sector, the output reflected a more substantial growth of 3.4% within the same timeframe, as reported by the Economic Development Board (EDB) of Singapore on Monday.
Moreover, seasonally adjusted figures revealed that July's manufacturing output surged by 10.1% compared to June. This significant growth trajectory continues even when the biomedical manufacturing sector is excluded, illustrating an impressive increase of 4.1%, according to the EDB's comprehensive data.
A highlight of this growth was observed in Singapore's thriving transport-engineering sector, which rebounded strongly as international travel resumed from the pandemic. Specifically, output within the transport-engineering segment showed a remarkable year-on-year increase of 13.3% in July. This can be attributed to the aerospace sector, which witnessed a staggering growth of 21.7% on a yearly basis.
This spike is largely driven by a heightened demand for aircraft parts, alongside an increase in maintenance, repair, and overhaul jobs being undertaken by commercial airlines, the EDB reported. On the other hand, the land-transport manufacturing segment followed suit with a significant annual growth rate of 16.5% in July as revealed by EDB's findings.
Contrastingly, the biomedical manufacturing output faced a notable setback, contracting sharply by 17.4% year-on-year in July, indicating the sector's volatile nature. This downturn also coincided with a decline in pharmaceutical production. Singapore's reputation as a leading hub for high-value products remains intact, as highlighted in a report by property brokerage JLL in July.
JLL emphasized that while Singapore may struggle to compete on cost and sheer production volume, it has successfully carved out a niche as a center for high-value, knowledge-intensive manufacturing industries encompassing semiconductors, the biomedical field, consumer electronics, and precision engineering.
In a broader context, Singapore's composite purchasing managers index (PMI), which encompasses both the manufacturing and services sectors, demonstrated positive momentum, rising to a seasonally adjusted 57.2 in July. This marks an increase from 55.2 recorded in June, further solidifying its position above the crucial 50-point threshold that delineates growth from contraction, as reported by S&P Global in early August.
It's important to note, however, that S&P Global does not release separate PMI reports for Singapore's manufacturing and service sectors, which might limit the specificity of sectorial insights available to analysts and stakeholders alike..