SINGAPORE – Singapore’s manufacturing sector is expected to continue declining in the first half of 2023 (H1 2023), mainly on the back of electronics, but the manufacturing downturn may be shallow, according to Maybank Research.
In its Economics Research report, the research house said the global purchasing managers’ index (PMI) fell to 48.6 in December, the lowest level since the Covid-19 lockdowns in June 2020.
The PMI is an economic indicator which comprises monthly reports and surveys from private sector manufacturing firms.
“China’s reopening could help cushion the downturn from the United States (US) and Europe, and reduce the odds of a recession.
“We think Singapore will likely decouple from the risk of a US recession in 2023, in part because of the reopening tailwinds and China’s reopening,” said Maybank Research.
On January 26, the Singapore Economic Development Board (EDB) announced that the republic’s manufacturing output decreased by 3.1% year-on-year (y-o-y) in December 2022.
On a three-month moving average basis, manufacturing output declined by 2.6% y-o-y in December 2022, it said, but noted that output in the electronics cluster increased by 4.6% compared to the same period in 2021.
Overall, the output of the electronics cluster grew 2.6% y-o-y in 2022, said EDB.
Maybank Research said in December 2022, the electronics cluster posted growth for the first time in six months, recording the highest output level since May 2022.
“Infocomms and consumer electronics led the rebound, climbing to an eight-year high, while semiconductors and other electronic modules and components fell at a more moderate pace from the previous month.
“We think the positive print is encouraging but may not last, as semiconductors will likely fall at a steeper pace in H1 2023 on the back of weaker global demand and also relative to last year’s high base,” it said. – Bernama, January 28, 2023
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