Singapore Oct chemicals output falls 2.2%; overall production grows

SINGAPORE (ICIS)–Singapore’s chemicals output in October fell by 2.2% year on year, but overall production is expected to continue posting growth well into early next year, led by the electronics sector.

• Oct overall manufacturing output up 1.2% year on year
• Key exports fell by 4.6% year on year in Oct
• Outlook for 2025 remains cloudy on expected protectionist measures

Output from the specialties segment fell by 31.7% year on year in October on lower production of mineral oil additives and biofuels, data from Singapore’s Economic Development Board (EDB) showed on Tuesday.

October petroleum output declined by 0.3% year on year, while petrochemical output grew by 4.6%.

In January-October this year, output from the chemicals cluster posted a 5.0% year-on-year growth.

Singapore’s overall manufacturing output in October rose by 1.2% year on year, partly driven by the electronics sector which grew by 4.3%.

On a seasonally adjusted month-to-month basis, manufacturing output barely grew, inching up 0.1% in October.

Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Shell, based at its Jurong Island hub.

“For the rest of 2024 and into early next year, growth momentum in trade-related sectors (including manufacturing) should be sustained, supported by the ongoing upturn in the electronics cycle,” said Jester Koh, an associate economist at Singapore-based UOB Global Economics & Markets Research.

Tailwinds from some front-loading of exports and attendant ramp up in production ahead of [US President-elect Donald] Trump’s proposed tariffs would also lend support to overall industrial output, Koh said.

On 22 November, Singapore downgraded its full-year 2024 non-oil domestic exports (NODX) growth forecast to around 1%, from an earlier projection of 4-5% made in August, according to trade promotion agency Enterprise Singapore.

“While the external environment is generally supportive of growth, uncertainties in the global economy such as a more challenging and competitive trade environment could weigh on global trade and growth,” it said.

Trump on 26 November said that he would sign an executive order upon taking office on 20 January 2025 to impose a 25% tariff on imports from Canada and Mexico and also outlined “an additional 10% tariff, above any additional tariffs” on imports from China.

For 2025, the outlook remains cloudy, and downside risks could emanate from further protectionist measures under Trump’s ‘America First’ policy, elevated geopolitical tensions, possible peak in the electronics cycle and uncertainty over the pace of monetary easing by major central banks, UOB’s Koh said.

Focus article by Nurluqman Suratman