Singapore factory output up 5.8% in March but misses analysts' forecasts as tariffs loom

Singapore's manufacturing production rose for the ninth straight month year on year but fell short of analysts' expectations.

- Sue-Ann Tan

Factory output expanded 5.8 per cent in March year on year, after an upwardly revised 0.9 per cent increase in February. Economists polled by Bloomberg had forecast growth of 8.1 per cent.

Excluding biomedical manufacturing, output grew 4.9 per cent, according to data from the Economic Development Board on April 25.

Indicating the slowing momentum though, on a seasonally adjusted month-on-month basis, manufacturing output dropped 3.6 per cent in March. Excluding biomedical manufacturing, it increased 0.8 per cent.

Analysts said the outlook for Singapore's key manufacturing sector is uncertain, with the effects of looming tariffs yet to be seen.

OCBC Bank chief economist Selena Ling said: "Depending on the eventual outcome of tariff negotiations during the 90-day suspension period for reciprocal tariffs... the outlook for the domestic manufacturing industry remains uncertain at this juncture.

"Even assuming that some of the tariffs, especially on China, are partially unwound over time, if companies have put on hold their capital expenditure, investments or hiring intentions, this would still imply some downside growth risk."

DBS Bank senior economist Chua Han Teng added that despite the improvement in factory activity in March, the outlook for the export-oriented sector "will likely weaken" especially for the second half of the year.