Singapore manufacturing set for 9% growth in 2026, RHB says

However, energy-intensive clusters face rising costs and supply-chain pressures.

Singapore’s manufacturing sector is expected to continue benefitting from the global technology upcycle and AI-driven demand, with RHB maintaining its 2026 industrial production growth forecast at 9%.

RHB said it remains positive on Singapore’s electronics and precision engineering clusters, citing strong exports, an expansionary manufacturing purchasing managers index (PMI), and forward-looking indicators from the Economic Development Board (EDB) as signs of firm industrial momentum in the second half of 2026.

The global surge in demand for semiconductors and electronic components to support AI workloads at data centres has boosted exports across Asia this year.

This has helped economies including Singapore cushion the effects of tensions in the Middle East and US trade tariffs.

However, the recovery is uneven across the manufacturing sector.

Electronics and other AI-related manufacturing are expected to remain resilient, whilst energy-intensive clusters face increasing cost and supply-chain pressures.

Singapore’s manufacturing PMI rose to 51.5 in August, supported by the AI-driven semiconductor upcycle.

The sector continued to face pressure from elevated energy costs and supply-chain disruptions linked to the prolonged Middle East crisis.

Within manufacturing, the electronics PMI increased to 52.6 in August, marking its 15th consecutive month of expansion.