Industrial production in Singapore contracted at a faster pace in March, reflecting a slump in the electronics and biomedical output, which together account for nearly half of the total production.
Friday, data released by the country's Economic Development Board showed that industrial output plummeted 33.9% year-on-year in March, far worse than the 15.1% fall seen in February. Economists expected production to drop only 24%.
Electronics output, which accounts for 43.4% of total production and one of the country's major export earners, dropped 34.6% annually in March, after falling 38.2% in February. Biomedical manufacturing output plunged 54.8% in March, due to a drop in pharmaceuticals output, after remaining flat in the preceding month. The biomedical sector accounts for 22.2% of total output.
Most other sectors also showed weakness in production. Chemicals output slipped 22.7% compared to a 21.9% decline, while the precision engineering output dropped 29.6%, after a 21% fall in February. Output of the general manufacturing industries contracted 10.5%, reversing the 0.6% growth in the preceding month. Transport engineering was the only sector to show a growth in output, increasing 0.8% in March, after rising 16.7% in the preceding month.
Month-on-month, industrial output dipped 13.9% in March, on a seasonally adjusted basis, following a 3.5% rise in February. Economists expected a fall of 0.3%.
The Monetary Authority of Singapore, in its latest report said the domestic economy of Singapore was likely to remain below potential until a recovery is seen in its export markets.
In the meantime, the slump in domestic demand also reflected in retreating inflation rates. Consumer prices rose 1.6% annually in March, much slower than a 1.9% increase in the preceding month. Inflation slowed for the sixth consecutive month in March.
Owing to the sharp fall in the domestic output over the past two quarters, the Monetary Authority of Singapore lowered the growth forecast for 2009, with the economy now expected to shrink between 6% and 9%.
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