Singapore Output Down 12.2% in August

Sept. 26, 2008
Possible signs of a technical recession

Singapore's manufacturing output fell 12.2% in August, more than economists expected, with the volatile pharmaceutical sector weighing heavily, official figures showed on Sept. 26.

The data further raise the possibility that the city-state, Southeast Asia's wealthiest economy, could fall into a technical recession, economists said.

The preliminary figures for August followed a decline of 21.5% in July and a 3% gain in June, data from the Economic Development Board (EDB) showed.

The biomedical manufacturing cluster showed the biggest decline in August. It was down 33.8% overall, led by pharmaceutical output which dropped 35.7% compared with the same month last year. It blamed the fall on a different mix of ingredients that was produced last month. Medical technology production fell 6.8%.

All segments of the electronics sector showed modest growth except for information-communications and consumer electronics products, which slumped by 60.8%, the EDB said. It cited "continued relocation of mobile device production" for that decline. Overall, electronics output in August fell 7.1%. In the chemicals cluster, output was down by 6% last month.

Transport engineering held steady, up 0.1% in August. The EDB said growth was largely confined to the aerospace segment which was up 13.9% because of more engine and commercial repairs from the region.

Singapore's open, trade-driven economy has been hurt by slowing global demand, and DBS Group Research said the latest output data "should provide a clue as to whether Singapore will enter into a technical recession." A technical recession is defined as two consecutive quarters of quarter-on-quarter contractions in the gross domestic product, the total value of goods and services produced in a country.

On an annualized, quarter-on-quarter basis, Singapore's economy contracted 6% in the second quarter, official data showed.

Copyright Agence France-Presse, 2008

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