Singapore industrial production weakened in May, with output falling 0.4 percent on the month after increasing 5.3 percent in April. Previously published trade and PMI survey data also showed a moderation in conditions in May, with June PMI data scheduled for release next week. Officials at the Monetary Authority of Singapore at their most recent meeting in early April announced they would target a slightly reduced rate of exchange rate appreciation.

In year-over-year terms, industrial production rose 3.9 percent in May after increasing 5.9 percent in April. Output growth in the electronics industry, which accounts for nearly half of the sector, slowed from14.6 percent to 3.9 percent. Output rose 6.1 percent on the year in the volatile biomedical industry after a previous decline of 1.8 percent, with growth also improving in year-on-year terms in the chemicals, transport engineering, general manufacturing and precision engineering industries. Excluding the biomedical industry, output advanced 4.9 percent on the year in May after increasing 7.8 percent in April.

Industrial production in Singapore is forecast to have slipped 2.3% on the month in May after rebounding 5.3% in April on a 2.7% dip in March. From a year earlier, output is seen posting an 11th straight rise but the pace of increase is expected to slow further to 2.4% from 5.9% in April and 6.8% the prior month.

The latest GDP data showed Singapore’s economy contracted a seasonally adjusted 0.6% on quarter in the first three months of the year, reversing a 0.5% expansion in the final quarter of 2024. The government expects the city-state’s economy to grow in a range of 0.0% to 2.0% in 2025, with Trump tariffs possibly triggering a technical recession (a second straight quarterly GDP drop).

The industrial production index measures changes in the volume of industrial production with respect to the base year. The index charts the growth in production of each major industry and of the manufacturing sector. Industrial Production measures the physical output of the nation's factories, mines and utilities. Factories manufacture various products, and the industrial production indexes have been prepared as a comprehensive indicator of wide-ranging production activities for such products and are regarded as some of the most important among economic indexes.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

Industrial production provides key industry data for export-dependent economies. It is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Detailed data in the report shows which sectors of the economy are growing and which are not.