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Manufacturing output falls 2.8% in November in worst showing this year

SINGAPORE – The Republic’s manufacturing output fell in November for the third consecutive month, shrinking by 2.8 per cent compared to the same period last year in what was the sector’s worst performance of the year so far.

A manufacturing and logistics facility in Singapore. TODAY file photo

A manufacturing and logistics facility in Singapore. TODAY file photo

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SINGAPORE – The Republic’s manufacturing output fell in November for the third consecutive month, shrinking by 2.8 per cent compared to the same period last year in what was the sector’s worst performance of the year so far.

The data released today by the Economic Development Board (EDB) comes on the heels of lacklustre export numbers last week. Among the worst performing clusters were general manufacturing products, chemicals, transport engineering and biomedical manufacturing.

The contraction fell short of expectations - economists polled earlier by Reuters had expected output to rise by 1.2 per cent.

EDB attributed the slump to lower contributions from rig building activities, weak demand for engine repair jobs, as well as plant maintenance shutdowns in the petrochemicals, specialties and petroleum refining segments.

Economists whom spoke to TODAY also cited the fall in global oil prices, which hit the petroleum refining segment hard, and a slowdown in China’s economy, among other factors. They added that the outlook for the months ahead will be uncertain.

CIMB economist Song Seng Wun said: “We keep our fingers crossed for next year. Much will depend on the strength of recovery in external demand from the United States, eurozone and Asia.”

Excluding biomedical manufacturing, output declined 3.1 per cent. Output of the transport engineering cluster and the chemical cluster decreased by 5.9 per cent and 6.9 per cent, respectively. In particular, output from petroleum refining fell by 24.1 per cent while the output from aerospace declined by 20.6 per cent.

The general manufacturing industries cluster’s output shrank 10.2 per cent.

OCBC economist Selena Ling said: “The performance has been affected due to the global outlook… and possibly a slowdown in China as one of the contributing factors.”

Mr Song said the fall in output from the aerospace and petroleum refining segments were larger than expected. “The aerospace segment is a more competitive industry and airlines may have cut back on maintenance to save on costs,” he added.

He noted that the performance of the petroleum refining segment was the worst since Sept 1989. “(It) has been affected by the global fall in oil prices and companies cutting back on (production),” he said.

The manufacturing output had fallen year-on-year in September and October by 1 per cent and 0.2 per cent, respectively. Last week, data from the International Enterprise Singapore showed that non-oil domestic exports (NODX) increased by 1.6 per cent last month – lower than economists’ expectations - compared to the same period last year. “The manufacturing performance for November echoes a similar weak performance for Singapore’s NODX in the same month. We expect overall performance for manufacturing for the year to end on a soft note,” said Ms Ling.

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