March 26, 2018 / 6:01 AM / 6 months ago

UPDATE 1 -Singapore Feb factory output rises 8.9 pct, tops forecast

(Adds analyst comments)

* Feb output: +8.9 pct y/y, -0.5 pct m/m seasonally adjusted

* Electronics: +17.4 pct y/y, pharmaceuticals up 15.2 pct

By Fathin Ungku

SINGAPORE, March 26 (Reuters) - Singapore’s industrial production in February rose more than expected from a year earlier due to a surge in electronics production, data showed on Monday.

Manufacturing output rose 8.9 percent last month from a year earlier, data from the Singapore Economic Development Board showed, exceeding the median forecast in a Reuters poll that flagged a 5.1 percent expansion.

On a month-on-month and seasonally adjusted basis, industrial production fell 0.5 percent in February, a much smaller decline than the 8.4 percent contraction forecast in the poll.

Electronics continued to be the star of the show for Singapore’s factories, growing at double digits for the second consecutive month.

Singapore, along with other trade-reliant economies in Asia, has got a boost from strong global demand in 2017, particularly for electronics products and components such as semiconductors.

“Underlying growth momentum in Singapore, Asia and globally is good,” said Standard Chartered economist Edward Lee, adding that trade protectionism could “derail” the positive momentum.

Electronics output in February jumped 17.4 percent from a year earlier after a 28.3 percent surge in January and it is likely to remain strong due to rapid digitisation across industries.

The sector’s growth was mainly attributed to the production of semiconductors, which climbed 26.7 percent from a year before.

“Structurally, demand (for Singapore’s semiconductor products) remains strong thanks to increasing digitisation needs which require more technical and hardware,” Lee told Reuters.

While Singapore’s economic growth hit a three-year high in 2017, policymakers and analysts said that the growth was too narrow and dependent on the electronics sector.

But manufacturing output growth was broad-based in February, with pharmaceuticals rising 15.2 percent from a year ago.

The Lunar New Year holidays took place in February this year, resulting in fewer business days than a year earlier. In 2017, the holidays began in late January. (Reporting by Fathin Ungku; Editing by Subhranshu Sahu)

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