Singapore: Manufacturing growth beats market expectations in October
November 26, 2010
In October, industrial production expanded 31.0% over the same month last year. The reading was up from the 26.8% growth recorded in September (previously reported: +26.2% year-on-year) and overshot market expectations of a 26.8% increase. The better-than-expected reading was driven by the volatile biomedical sector, which expanded 107.3% (August: -29.1% yoy; September: +49.2% yoy). Typically, pharmaceutical production fluctuates wildly as manufacturers close plants for cleaning before switching their production to different drugs. The exuberant growth in the biomedical sector was partially offset by a 46.6% drop in computer peripherals production. A month-on-month comparison corroborates the strong growth suggested by the annual figures, as manufacturing output rose 2.2% over the previous month in seasonally adjusted terms. As a result of the October reading, the annual average growth rate improved to 26.4% (September: +24.0%). Consensus Forecast participants have raised their industrial production growth projection by 1.2 percentage points, and now expect manufacturing to expand 31.5% in 2010. For 2011, panellists see manufacturing output growing 6.2%, which is down 0.7 percentage points from last month's estimate. The government anticipates the economy will grow 15.0% this year, and between 4.0% and 6.0% in 2011. Consensus Forecast panellists expect the economy to grow 12.0% year-on-year in the fourth quarter. For the full-year, the panel anticipates GDP to grow 14.6%. In 2011, economic growth is expected to moderate to 5.2%, which is up 0.3 percentage points from last month's estimate.