Singapore's production growth quickens on pharmaceutical output

Singapore’s industrial production grew at the fastest pace in five months in August after output of pharmaceuticals surged, offsetting a slump in electronics manufacturing as global demand weakens.

Manufacturing, which accounts for more than a fifth of the economy, gained 21.7% from a year earlier after a revised 7.6% increase in July, the Economic Development Board said in a statement today. That exceeded the estimates of all 14 economists surveyed by Bloomberg News.

 

Europe’s debt crisis and a faltering U.S. recovery are imperiling economic growth in Asia, prompting central banks from South Korea to the Philippines to refrain from interest-rate increases in recent weeks. Singapore Finance Minister Tharman Shanmugaratnam said this month the island won’t be immune to a global slowdown as the U.S. and European economies stall.

 

“Whether this performance will be sustained remains to be seen given a still weak electronics sector and a very volatile biomedical sector,” Vincent Conti, a Singapore-based analyst at Australia & New Zealand Banking Group, said before the report.

 

Singapore’s industrial production rose a seasonally adjusted 3.9% in August from July, when it climbed a revised 0.4% from the previous month, today’s report showed. Economists predicted a 5% decline.

 

Electronics production decreased 21.9% from a year earlier, while pharmaceutical output surged 156.7%.

 

North American orders for semiconductor equipment fell 8.8% in August from a month earlier, a trade group report showed. The book-to-bill ratio, a gauge of industry health, was 0.8, meaning chip-equipment companies received US$80 in new orders for every US$100 ($130.4) in sales. A ratio below 1 indicates a contracting market for chip-equipment tools.