Singapore's tepid manufacturing sector seems to have mounted a comeback last month - but scratch beneath the surface and a less rosy picture emerges.
Manufacturers produced 3.3 per cent more in July than they did in the same month last year, the Economic Development Board said yesterday.
While this was stronger than June's 0.8 per cent rise, July's growth in factory output was given a leg up by a 28.5 per cent surge in biomedical manufacturing from the previous year.
This jump was led by robust export demand for medical instruments and supplies and a more valuable mix of drugs.
But strip out this segment and overall factory output would have slipped 2.2 per cent.
This is the first time manufacturing output, excluding biomedical production, has contracted this year.
Economists said prospects across the sector, which makes up about a fifth of the Singapore economy, remain patchy amid ongoing economic restructuring and still-tepid global growth.
This showed up in mixed performances across various manufacturing segments last month.
Chemicals' production provided a boost last month by rising 9.2 per cent, and precision engineering output increased by 4.4 per cent.
Electronics makers, however, entered their fourth straight month in the red with a 2.9 per cent fall in output in July over the same month last year.
This was mainly caused by weak semiconductor production, which dipped 1.6 per cent.
Other segments which shrank included transport engineering, down 9.9 per cent from a year earlier, and general manufac-turing, which dipped 5.9 per cent.
Month-on-month, manufacturing output rose 2.7 per cent in July over June, the first increase since March.
Singapore's manufacturing output has grown 5.2 per cent so far this year, a "seemingly strong" rate of expansion given that production rose just 1.7 per cent for the whole of last year, said UOB economist Francis Tan.
However, much of this was caused by a "cyclical recovery" in the first three months of the year owing to a low base in the first quarter of last year, he added.
Barclays' senior regional economist Leong Wai Ho said the pace of the recovery in Singapore's manufacturing sector has been subdued in comparison with economies like Taiwan.
However, the electronics sector in particular is expected to benefit from stronger demand from the United States in the months ahead, he added.
This article was first published on Aug 26, 2014.
Get a copy of The Straits Times or go to straitstimes.com for more stories.