SINGAPORE, Feb 26 ― Singapore's industrial production in January fell much less than expected in January, but the 12th consecutive month of output loss will keep policy makers focused on supporting an economy running low on momentum.

Factory output dipped 0.5 per cent in January from a year earlier, data from the Economic Development Board (EDB) showed today. That beat a forecast fall of 4.8 per cent in a Reuters poll.

On a month-on-month and seasonally adjusted basis, industrial production increased 9.3 per cent in January, much better than the 1.8 per cent slide tipped in the survey.

The better-than-expected numbers were led by output in the volatile pharmaceuticals sector surging 34.3 per cent in January on year. Production in the sector in December slid 7.6 per cent.

“We should not actually be fooled by the data. It's very clear that manufacturing ex-biomed continues to contract and it will continue to do so in the coming months,” said Weiwen Ng, economist at ANZ in Singapore.

Excluding biomedical output, industrial production fell 7.0 per cent in January from a year earlier after tumbling 13.8 per cent in December, reflecting the broad downturn in global demand and a slowdown in China that have wreaked havoc on exporters from Brazil to Australia to Japan.

In 2015, the trade-dependent city state's exports fell 0.1 per cent ― the third straight year of annual declines and the first such consecutive drop on record. Data last week showed exports to China ― Singapore's top overseas market ― dived 25.2 per cent.

The hit to exports has led to a deep contraction in the key manufacturing sector, leaving Singapore's economy starved of growth drivers and keeping pressure on policy makers to step up stimulus. Some analysts expect the Monetary Authority of Singapore (MAS) to ease policy at its April review.

The EDB data also showed marine and offshore engineering production in January slumped 29.7 per cent from a year earlier, as falling oil prices hit demand for offshore drilling rigs.

ANZ's Ng said the government could unveil fiscal stimulus at next month's budget.

“You could have some measures introduced in the budget to help the economy. That could reduce the need for MAS to actually to ease,” Ng said. ― Reuters