* Singapore Dec IP -0.6 pct y/y, +5.4 pct m/m
* Growth in pharma, drugs offset decline in electronics
* S'pore electronics has underperformed region - C.Suisse
* Electronics sector healthier than economists believe - EDB
By Kevin Lim
SINGAPORE, Jan 25 Singapore's industrial output
in December nearly matched the year-earlier level as higher
production of drugs and oil rigs offset continued weakness in
electronics, easing fears that fourth quarter gross domestic
product data would be revised downwards.
The Economic Development Board (EDB) said on Friday
industrial production slipped 0.6 percent in December from a
year ago as a 21.0 percent jump in pharmaceuticals and a 14.8
percent rise in marine and offshore engineering offset a 16.9
percent year-on-year drop in electronics.
However, the drop in electronics was the worst year-on-year
performance since January 2012, said CIMB regional economist
Song Seng Wun.
"There was a late burst of activity in pharma and rigs. We
didn't see this in the trade numbers and it could be because of
the reporting lag between production and exports," he said.
Assuming there were no changes to services and construction,
detailed GDP numbers will likely be in line with advanced
estimates showing Singapore's GDP expanded by an annualised 1.8
percent in the fourth quarter from the third quarter after
seasonal adjustments, he added.
According to a Reuters poll, economists had expected the
government to report a 4.3 percent year-on-year fall in December
Singapore's industrial production gained 5.4 percent in
December from November after seasonal adjustments, beating the
poll's median estimate of a rise of 0.2 percent.
For all of 2012, production was 0.1 percent higher than in
Most economists have predicted a downward adjustment in the
GDP growth number following the publication of
much-weaker-than-expected December export data.
The detailed fourth quarter GDP report is expected to be
released in the week ending Feb. 22.
The government has said Singapore grew 1.2 percent in 2012,
compared with 4.9 percent the previous year.
Singapore exports most of what it produces and manufacturing
accounts for about one-quarter of its GDP.
The weakness in Singapore's exports and industrial
production has been due mainly to electronics, whose output
contracted 11.3 percent for the whole of 2012.
REGIONAL ELECTRONICS UNDERPERFORMER?
Credit Suisse, in a report this week, said Singapore's
electronics exports have underperformed the region in recent
years due to their greater reliance on slower growing industries
such as hard disks and personal computers. In contrast, Taiwan
and South Korea are plugged into the fast-growing market for
smart phones and computer tablets.
The strong Singapore dollar has also hurt manufacturers,
Credit Suisse said.
EDB, however, said export values did not accurately reflect
the strength of Singapore's electronics sector.
"As manufacturing activities in our electronics industry
shifts from the production of finished or semi-finished products
towards the making of components, the export value of each
product that is manufactured here decreases," said EDB's deputy
director for electronics Terence Gan.
The drop in export values does not, therefore, correspond to
a fall in value-added, he said.
Electronics continues to account for the biggest share of
fixed asset investments in Singapore, and companies such as
Qualcomm, Applied Materials and STATS ChipPAC
have made recent investments to boost manufacturing as
well as research and development, Gan added in response to
queries from Reuters.
(Editing by Richard Borsuk)