Singapore November factory output below forecast, may temper Q4 GDP

SINGAPORE (Reuters): Singapore’s industrial production in November rose less than expected from a year earlier, underscoring expectations for a moderation in the city-state’s economic growth in the fourth quarter.

Manufacturing output rose 5.3% last month from a year earlier, weaker than the median forecast in a Reuters poll that flagged 9.0% growth.

The latest production data reinforces the likelihood that economic growth in the October-December quarter will slow after a stellar third quarter, said Francis Tan, an economist for United Overseas Bank.

“On a year-on-year basis it will pull back from the strong GDP that we saw in the third quarter,” Tan said.

Economists have been flagging the chances of a moderation in fourth-quarter economic growth, partly because of a comparison against a high base recorded late last year.

On a month-on-month and seasonally adjusted basis, manufacturing output fell 2.3% in November, data from the Economic Development Board showed. The median forecast was an increase of 0.7%.

Industrial production was underpinned by electronics output, which increased 27.6% from a year earlier, with semiconductor production rising 36.4%.

Such gains, however, were lower than the expansions recorded in October, when electronics output surged nearly 45% and semiconductor production jumped 64%.

Weakness in pharmaceuticals and marine offshore engineering output tempered the overall rise in industrial production in November, with pharmaceuticals output shrinking 31.1% and offshore engineering production sinking 31.9%.

The production data came just a week before the release of the government’s advance estimate of fourth-quarter gross domestic product, which is due on Jan. 2.

In the third quarter, Singapore’s economy grew 5.2% from a year earlier, its quickest year-on-year pace in nearly four years, thanks to a boom in manufacturing that some analysts say will encourage tighter monetary policy in 2018.

Separate data on Tuesday showed Singapore’s headline consumer price index rose a slightly faster-than-expected 0.6% in November from a year earlier as private road transport costs edged higher.

The central bank’s core inflation gauge increased 1.5% from a year earlier, in line with expectations and matching October’s pace.