Singapore's manufacturing output up 12.6%

By Sohita98

Singapore's manufacturing output rose more than expected in December 2011, after a surge in activity in the biomedical sector.

Manufacturing output jumped 12.6 per cent from a year ago, the Economic Development Board (EDB) said Thursday.

Market economists had forecast a rise of about seven per cent.

Irvin Seah, an ecnomist with DBS Bank, said: "This will actually lift overall GDP growth for the fourth quarter of last year up to 4.2 per cent from the previous advanced estimates of just 3.6 per cent.

"The pull-back in GDP growth in the fourth quarter of last year has been less severe than what many people predicted earlier on."

Output from the biomedical sector surged 111.6 per cent last month after a 121.6 per cent expansion in pharmaceuticals.

Excluding the biomedical industry, total output declined 9.0 per cent.

On a seasonally adjusted month-on-month basis, the EDB said manufacturing output increased 7.8 per cent in December 2011, after a 24.5 per cent slump in the previous month. Excluding biomedical manufacturing, output rose 6.7 per cent.

The rate of growth for the year had exceeded the 2.2 per cent expansion forecast by economists.

Leong Wai Ho, senior regional economist at Barclays Capital, said: "This manufacturing rebound that we have seen for some time, that became very pronounced in December, will actually be quite sustainable going into the earlier months of the year.

"We are calling for next quarter to display sequential growth - on a quarter on quarter basis. In fact, I think this rebound in IP in December has actually narrowed significantly - the Q4 contraction and GDP that was reported in the advanced estimates."

Some economists have also observed that GDP growth in China has accelerated in the last three quarters of 2011. This, together with some of the positive economic figures from the US, can help divert some of the headwinds from the eurozone crisis.

Some observers were also optimistic with the eurozone debt crisis.

Wu Kun Lung, an economist with Credit Suisse, said: "Our base case assumption is that they will avoid a financial crisis - a breakup type of scenario. If that is the case, then we think most of the things will start to bottom out pretty much now.

"So the excluding-bio med sequentialNIKE AIR HUARACHE