Singapore's industrial production (IP) posted a robust performance in March, with a 4.7% month-on-month seasonally adjusted (m/m sa) increase and a 10.1% year-on-year (y/y) rise, compared to February's -1.2% m/m sa and 3.3% y/y figures [1]. This strong showing in manufacturing led to a 1Q26 manufacturing growth of 7.9% y/y, surpassing the 5.0% y/y reported in the advance estimates (AE) [1]. United Overseas Bank’s (UOB) Jester Koh noted that, assuming construction and services activity remained unchanged from the AE, this could result in an upward revision to 1Q26 GDP growth to approximately 5.2% y/y, up from the 4.6% in the AE [1].
The electronics sector was a key driver, with output rising 5.7% m/m sa in March (February: 5.1%), led by semiconductors benefiting from strong AI-related demand [1]. Precision engineering also saw a significant 21.8% m/m sa jump, rebounding from a -13.3% decline in February, attributed to higher production of optical instruments, electronic connectors, metal precision components, and semiconductor equipment [1].
In contrast, the chemicals sector experienced a sharp downturn, with output plunging -18.5% m/m sa in March (February: -1.8%), driven by declines in petroleum (-13.4% m/m sa) and petrochemicals (-23.9% m/m sa) [1]. The Economic Development Board (EDB) attributed this to 'disruptions in feedstock supply,' while news sources reported that several Asian refineries and petrochemical companies have cut runs or declared force majeure due to these challenges [1].
Looking ahead, UOB's Koh cautioned that headwinds in the petrochemicals segment could intensify as refineries deplete their limited feedstock inventories. However, he also suggested that overall industrial production could remain resilient, supported by continued strength in electronics and semiconductor output amid ongoing AI-related demand [1].
CONCLUSION
Singapore's March industrial production data highlights the resilience of the electronics and semiconductor sectors, which are offsetting significant weakness in chemicals and petrochemicals. While headwinds in the petrochemical segment may intensify, strong AI-driven demand in electronics is expected to continue supporting overall industrial output.