CGS International
August 26, 2025

Singapore’s Manufacturing Sector Surges in July: Electronics Lead Growth Amid Tariff Uncertainties

Strong Industrial Rebound in July 2025 Surpasses Market Expectations

Singapore’s manufacturing sector delivered a robust performance in July 2025, with the Industrial Production Index (IPI) rising by 7.1% year-on-year. This impressive growth matched the previous month’s figure, handily beating both Bloomberg’s consensus forecast of 0.9% and CGS International’s own estimate of 2.2%. Excluding the often-volatile biomedical manufacturing segment, output climbed an even stronger 9.4% year-on-year.
On a seasonally adjusted month-on-month basis, the IPI rebounded by 8.2% in July after a 0.8% decline in June. Excluding biomedical manufacturing, output still posted a solid 7.1% month-on-month gain, demonstrating broad-based momentum across most clusters—except general manufacturing, which contracted by 9.7% year-on-year.

Electronics and Semiconductors: Engines of Growth, But Tariff Risks Loom

The electronics cluster was the top growth driver, expanding a remarkable 13.1% year-on-year, up from 6.6% in June. Semiconductor output—a dominant 30.7% of the electronics sector—grew by 9.6% year-on-year, accelerating from 4.3% in June. This surge was underpinned by resilient global demand for chips, notably from AI, data centers, and consumer electronics.
However, the sector faces upcoming headwinds. The announcement of 100% US tariffs on all chip imports, except those from companies manufacturing or transitioning to manufacturing in the US, casts uncertainty on future momentum. While the immediate impact remains unclear, ongoing policy developments could dampen growth in the coming quarters. For the first seven months of 2025, electronics output rose by a robust 8.6% year-on-year.

Transport Engineering: Aerospace Leads the Way

The transport engineering cluster, accounting for 8.2% of total manufacturing, delivered a strong 15.8% year-on-year increase in July, up from 9.2% in June. Aerospace was the standout segment, soaring by 22.7% year-on-year on the back of higher aircraft parts production and sustained maintenance, repair, and overhaul (MRO) demand from commercial airlines.

Other Key Manufacturing Clusters: Mixed Performance

Precision Engineering saw a 9.6% year-on-year rise in July, with Machinery & Systems up 11.7%, while Precision Modules & Components grew a modest 0.9%.
Chemicals output rose 4.2% year-on-year, supported by a 5.2% increase in petroleum and a 10.4% jump in specialities. Conversely, petrochemicals slipped by 1.3%.
Biomedical Manufacturing was nearly flat at 0.2% year-on-year in July, with pharmaceuticals up 2.7% but medical technology only rising 3.3%.
General Manufacturing remained a laggard, contracting 9.7% year-on-year, mainly due to declines in food, beverages & tobacco (-11.3%) and miscellaneous industries (-8.2%).

Comprehensive Table: Singapore Manufacturing Performance by Cluster

Purchasing Managers’ Index and Sector Sentiment

Singapore’s Manufacturing PMI edged back into contraction at 49.9 in July versus 50.0 in June, reflecting heightened concerns about global trade policy uncertainty. Despite this, the electronics PMI remained in expansion at 50.2, indicating ongoing resilience in that key sector. Nonetheless, the looming threat of US semiconductor tariffs could weigh on future sentiment and growth trajectories.

Business Expectations and Sector Outlook

Firms anticipate a seasonal pickup in orders for the coming months, particularly in electronics.
However, expectations are tempered by concerns over potential US tariffs and global trade negotiations.
Downside risks remain elevated, leading CGS International to maintain its 2025 IPI growth forecast at 3.0% year-on-year.

Macro Forecasts: Singapore and Regional Economic Indicators

Key Takeaways and Investment Implications

Singapore’s manufacturing sector is experiencing a broad-based rebound, led by strong electronics and aerospace gains.
Ongoing US trade policy uncertainty—especially new semiconductor tariffs—pose downside risks to future growth.
General manufacturing continues to lag, with persistent contractions in several sub-segments.
Business sentiment remains cautious, as reflected in the marginal dip of the headline PMI, though electronics remain resilient.
CGS International maintains a 2025 IPI growth forecast of 3.0% year-on-year, reflecting both current strength and future risks.

Conclusion: Navigating a Mixed Outlook

Singapore’s manufacturing sector is demonstrating notable resilience and adaptability, with the electronics and transport engineering clusters driving robust expansion. However, uncertainties stemming from global trade tensions—especially US tariffs on semiconductors—may weigh on the sector’s prospects in the months ahead. Investors should monitor policy developments closely, as the sector’s outlook remains a delicate balance of opportunity and risk. The coming quarters will be crucial in determining whether Singapore’s industrial rebound can be sustained or will succumb to external headwinds.