Singapore Dec chemical output up 1%; overall industries to stay strong
SINGAPORE (ICIS)–Singapore’s chemicals cluster output rose by 1.2% year on year in December, with the expected recovery in global demand likely to fuel continued expansion in industrial production in 2022.
Production in the petroleum and petrochemicals segments in December expanded by 14.7% and 8.2%, respectively, coming from a low base in the same period in 2020 amid the COVID-19 outbreak, data from the Economic Development Board (EDB) showed.
Singapore is home to a major regional petrochemical hub in Jurong lsland, where global energy giants, such as Shell and ExxonMobil, have manufacturing operations.
The specialties segment declined by 2.3% year on year in December, with lower production of mineral oil additives while the other chemicals segment contracted 11.1% with lower output in fragrances.
For the whole of 2021, Singapore’s overall chemicals cluster output posted a 9.2% growth.
Overall manufacturing output in the country rose by 15.6% year on year in December, accelerating from the 14.1% expansion in the previous month.
“Being an export-oriented economy, Singapore’s expansion in industrial production was supported by the continued favourable global demand backdrop,” said Barnabas Gan, economist at Singapore-based UOB Global Economics & Markets Research.
“Note that non-oil domestic exports (NODX) recorded an 18.4% year on year expansion in December 2021, suggesting that Singapore’s export and manufacturing environment remains largely resilient despite COVID-19- related risks,” it said.
For the full year, Singapore’s manufacturing output rose by 13.2% year on year.
“We keep to our view that Singapore manufacturing prognosis remains favourable especially given the strong numbers seen to-date,” Gan said.
“Our outlook is for full-year manufacturing to grow by an average of 4.0% in 2022. This suggests that despite the high-base growth rate seen in 2021, global trade activity is expected to stay buoyant in the new year,” Gan said.
Singapore’s manufacturing sector will be driven by the twin engines of electronics and pharmaceuticals production, said Japan’s Nomura Global Economics in a note.
Nomura noted that the strong manufacturing output reading in December was well above the 10.8% year-on-year implied by the official advance fourth-quarter GDP estimate for manufacturing.
“This hints at an upward revision of Q4 GDP growth by 0.3 percentage points (pp) from 5.9% year-on-year, by our estimate, and for full-year 2021 to 7.3% from 7.2%,” it said.
Prime Minister Lee Hsien Loong had earlier said that he expects the Singapore economy to expand by 3-5% in 2022.
“We think the sequential decline in [December] electronics output was likely temporary, amid still-strong electronics exports in the same month and the still-robust expansion in output in the precision engineering sector,” according to Nomura.
Focus article by Nurluqman Suratman