VINACHEM

Singapore’s chemicals production declined 3.2% year on year in April amid tariff-led front-loading, official data showed on 26 May, while a pause in ‘reciprocal’ tariffs could support further growth in H2 2025.

Petrochemicals production falls 3.4% in April year on year

Overall chemicals cluster output down 3.1% in Jan-Apr

2025 GDP forecast of 2.0% in anticipation of fiscal measures – Nomura

The “other chemicals” segment grew 4.1%, driven by increased fragrance output for consumer products, while petrochemicals, petroleum and specialties segments declined by 3.4%, 4.6% and 5.7% respectively last month, the Economic Development Board (EDB) said.

High inventory drove declines in petrochemicals and petroleum refined products output, and maintenance shutdowns affected the production of mineral oil additives in the specialties sector.

Overall, the chemicals cluster’s output declined by 3.1% in the first four months of 2025 compared to the same period last year.

Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Shell, based at its Jurong Island hub.

Overall, general manufacturing output grew 5.9% year on year in April, declining from the 6.8% growth figure recorded in March.

Excluding biomedical manufacturing, output rose by 8.1%.

On a three-month moving average basis, overall output rose by 4.6% compared to the same period last year.

Seasonally adjusted month-on-month figures showed a 5.3% increase in April, and excluding biomedical manufacturing, a 4.7% increase.

“Growth momentum in the second half of 2025 could continue to experience some bouts of resilience given the current pause on reciprocal tariffs and … truce on US-China trade tensions opens a window for continued front-loading by exporters,” said Jester Koh, Associate Economist at Singapore-based UOB Global Economics & Markets Research.

However, Koh warned of “payback effects” from front-loading that could result in an even more protracted decline in trade and manufacturing activity in the later half of the year, and into the first half of 2026.

UOB raised Singapore’s 2025 growth forecast to 1.7% from 1.5% previously, but lowered its 2026 growth projection to 1.4%, from 1.6%.

Concurring with Singapore’s own GDP growth forecast of 0-2% for 2025, Nomura maintained their forecast of 2.0%, in anticipation of large fiscal support measures, which would be worth around 1.0% of GDP.   – Source: ICIS