AI Tailwinds Lift Singapore Manufacturing Export Growth 2026 Forecasts Again

Forecast upgrades in 2026 keep clustering around one theme: AI is pulling more electronics through Singapore’s trade and production base. Enterprise Singapore lifted its 2026 non-oil domestic exports (NODX) forecast to 3% to 5%, up from 2% to 4%, after a better-than-expected first quarter led by electronics. In Q1 2026, NODX rose 9.6% after a 12.7% gain in Q4 2025. The electronics split was the standout, with shipments up 57.8% in Q1 2026, accelerating from 23.4% the prior quarter, while non-electronics NODX fell 3.5% after growing 9.4% in Q4 2025.

The manufacturing side is telling the same story, and it helps explain why Singapore manufacturing export growth 2026 expectations have stayed resilient. In January, factory output climbed 16.6% year on year, exceeding a median 12.1% forecast cited in a Bloomberg poll. Excluding biomedical manufacturing, industrial production rose 24.1% year on year, versus December’s revised 13.1% increase. The electronics cluster rose 44% in January, more than doubling December’s 19.6% increase. Singapore’s PMI also moved to 50.5, its highest reading in 10 months, and the electronics sector recorded its eighth straight month of expansion, reinforcing the idea that AI-linked orders were not limited to a single data point.

Why AI Demand Keeps Forcing Upward Revisions

Economists and policymakers have described the AI channel as both direct and indirect. MAS said worldwide AI-related demand has been a key underlying driver of domestic production and exports, and noted Singapore’s real-economy exposure is primarily upstream, including manufacturing semiconductors and servers that support data centres and cloud providers. DBS Bank’s Chua Han Teng linked the external boost to global AI tailwinds and a shift toward increased use of agentic AI. He also said the city-state has benefited indirectly through its integration into the AI ecosystem, including electronics export momentum to upstream players such as Taiwan. Private-sector expectations echoed that view: UOB’s Jester Koh cited an estimated 30% increase in capital expenditure by major technology firms supporting tailwinds into at least H1 2026.

By April, the factory cycle again confirmed broad strength, while still showing unevenness across clusters. Singapore’s manufacturing output rose 17.6% year on year in April, and was up 21.5% excluding biomedical manufacturing. On a seasonally adjusted month-on-month basis, output increased 5.8% in April, both overall and excluding biomedical. Electronics led again with 44% growth year on year, driven by the infocomms and consumer electronics and semiconductors segments on robust AI-related demand. Other clusters also expanded, including general manufacturing (16.9%), precision engineering (15.1%), and transport engineering (10.1%), showing that the AI-linked upcycle can coincide with wider industrial momentum.

Still, the upgrade narrative is not a straight line, and the risks are repeatedly flagged alongside the upside. In April, chemicals fell 17.6% year on year, with the decline tied to ongoing Middle East disruptions, and biomedical manufacturing fell 16.1% for a fifth straight month of contraction. Enterprise Singapore also pointed to higher downside risks from the Middle East conflict, while DBS highlighted rising input cost pressures and longer delivery lead times linked to the conflict. Yet global trade assumptions have also improved: Enterprise Singapore noted the WTO upgraded its 2026 global merchandise trade volume growth forecast to 1.9% from 0.5%, citing continued strength in AI-related trade and a smaller-than-expected drag from tariffs.