Singapore Nov factory output likely up on base effects

SINGAPORE – Singapore’s factory output probably rose in November from a year earlier when regional manufacturing supply chains were disrupted by floods in Thailand, a Reuters poll showed.

But the sector remains weak, with little growth expected on a month-on-month basis, amid continued weakness in Western economies that has crimped demand for Singapore-made electronic component and products. Singapore exports most of what it produces and its trade is three times gross domestic product.

According to the median estimate of nine economists in a Reuters poll, Singapore’s industrial production rose 4.8 percent in November from a year ago. From a month ago and after seasonal adjustments, output inched 0.5 percent higher, according to the seven economists who provided month-on-month estimates.

“A low base in pharmaceutical and electronics output due to disruptions related to flooding in Thailand last November should have buoyed the year-on-year growth rate,” Barclays said in a note to clients.

Most economists expect electronics to underperform once again, judging by the surprise fall in Singapore’s November exports and the fifth consecutive month of contraction in the city-state’s purchasing managers’ index.

Other parts of Asia have been faring better than Singapore.

HSBC’s PMI for China in December expanded by its fastest pace in 14 months and Taiwan reported on Thursday that export orders grew 11 percent in November from a year ago, handily beating expectations.

Singapore’s industrial output can differ from its exports as there is sometimes a time lag between production and shipment of large items such as oil rigs. In addition, output of pharmaceuticals tends to be highly volatile from month to month.

The export data tracks the value of goods sold abroad in Singapore dollar terms while industrial production is based on an index that takes into consideration the value-added.