By TEH SHI NING

Industrial output in January fell 29.1 per cent from a year ago, the largest plunge recorded so far.

This was worse than economists' consensus forecast of a 24.3 per cent decline, and follows a revised year-on-year decline of 12.8 per cent in December.

Releasing preliminary figures yesterday, the Economic Development Board (EDB) attributed the manufacturing output decline to 'the global economic downturn and Chinese New Year festivities', which fell in January this year versus February last year, as several plants shut down over the holidays.

The high base - manufacturing performance was strong last January - is another factor behind the huge drop, HSBC economist Robert Prior-Wandesforde pointed out. 'Nonetheless, underlying momentum remains weak, although less so than in December,' Citi economists said.

Month-on-month, January's seasonally adjusted factory output fell 4.4 per cent in January compared to December's 7.6 per cent drop. Excluding the volatile biomedical manufacturing cluster, which shrank 27.3 per cent last month after two months of year-on-year growth, industrial production fell 29.8 per cent from last January.

Leading this decline was electronics output, which plunged 43.1 per cent in January, after a 35.4 per cent fall in December. Output fell across all electronics segments 'due to the lacklustre demand for electronic products worldwide', EDB said.

Output from the other manufacturing clusters was also weak. Excluding biomedical and electronics output, industrial production still fell 20.4 per cent, almost double the 10.4 per cent drop recorded in December, Citi economists noted.

Production slumped in both the precision engineering (37.4 per cent) and chemicals (24 per cent) clusters, while output from general manufacturing industries, such as printing, and food, beverages and tobacco, shrank 19.1 per cent.

Transport engineering was the sole cluster to post output growth of 3.3 per cent, boosted by work on previously secured ship-building, ship-repairing and oil rig contracts.

'With the deepening macro slowdown and cyclical and structural issues, we believe Singapore's exports data is likely to show continued contraction, exerting further pressure on the production trend,' Morgan Stanley's research team said.

This article was first published in The Business Times.