Get ready to be disappointed by July's industrial production figure, analysts warn

Headline figure will tick up but stay in the red.

Singapore’s July industrial production figure is unlikely to bring manufacturers much hope. DBS analysts expect the headline number to remain in the red with a 2.7% year-on-year contraction, albeit a month-on-month improvement compared to the drop of 4.4% in June.

The weakness could be blamed on the 0.8% year-on-year decline in non-oil domestic exports, coupled with the persistently gloomy global economic outlook.

“This is underscored by the drastic slowdown in China, which probably has eroded the modest gains in consumer demand in the US. Though hope is pinned on possible bottoming-out in the electronics cluster and that the IP number could register a positive MoM gain, it has to be moderated against the possibility that this could merely be seasonal effect at play,” DBS warned.