June 26): Singapore’s industrial output fell the most since November 2019, raising the risk of the economy slipping into a technical recession.

Factory production declined 10.8% from a year earlier in May, worse than the 7.3% drop predicted in a Bloomberg survey, marking the eighth straight month of contraction.

Output of the electronics industry, which accounts for the largest weight in the city-state’s export-driven manufacturing sector, plunged 23% on the year, with semiconductors seeing the cluster’s worst drop.

Economists, including from Barclays plc and Maybank Research, now expect Singapore’s economy to contract in the second quarter compared to the previous three months, enough to count as a technical recession after first-quarter’s 0.4% decline.

Earlier, Singapore had downgraded non-oil export trade growth this year to a drop of between 8% and 10% due to worse-than-expected performance in manufacturing. Although authorities then kept the full-year growth view unchanged at 0.5%-2.5%, Maybank’s senior economist Chua Hak Bin expects they will downgrade the forecast amid signs of persisting manufacturing downturn.