SINGAPORE, Aug. 27 (Xinhua) -- Singapore's manufacturing growth slowed to a four-month low of 6.8 percent year on year in July, but economists said demand linked to the global artificial intelligence (AI) boom should continue to support the electronics and precision engineering sectors in the months ahead.
Maybank Investment Bank said in a note on Wednesday that the moderation in electronics output growth was unlikely to signal an imminent end to the AI-driven technology upcycle.
Singapore's electronics industry continues to benefit from lasting support tied to the global AI infrastructure buildout, underpinning a resilient outlook in the coming months, the research house said.
Demand for semiconductor equipment also remains robust amid a global expansion in chip fabrication capacity. Singapore accounts for an estimated 20 percent share of global semiconductor equipment production, Maybank said.
Separately, in a note on Wednesday, RHB Investment Bank maintained its forecast for Singapore's industrial production to grow 9 percent in 2026, expecting the electronics and precision engineering sectors to continue benefiting from the global technology upcycle and strong AI-driven demand.
RHB expects industrial production growth to moderate to around 7.8 percent in the second half of the year, while maintaining its full-year gross domestic product growth forecast of 4.5 percent.
However, UOB Global Economics and Markets Research said there were early signs that AI-related tailwinds could be moderating.
According to the research house, domestic firms may be facing some capacity constraints, as the new orders sub-index of the electronics Purchasing Managers' Index continues to outpace the output sub-index.
Meanwhile, a decline in the stocks of finished goods sub-index suggests firms are drawing down inventories to meet demand. This could nevertheless support electronics production in the coming months as inventories eventually need to be replenished, UOB said in a note on Wednesday. ■