Singapore's factory output fell less than expected in July as a decline in the precision engineering and general manufacturing industries was partially offset by gains in the electronics and transport sectors.
Manufacturing output fell a seasonally adjusted 2.2 percent from June, after a revised 19.5 percent surge in June and a marginal 2.4 percent increase in May.
A Reuters poll had forecast a seasonally adjusted 7 percent fall in July.
"The seasonally adjusted decline in July is due to a decline in precision engineering and general manufacturing industries clusters," the Economic Development Board (EDB) said in an e-mail on Monday's data.
The electronics sector grew a seasonally adjusted 1.5 percent in July from June, the EDB said. The transport engineering cluster grew 5.2 percent, while the chemicals sector rose 2.0 percent.
"The numbers are much better than expected and it shows that manufacturing is still growing at a healthy pace. Sequentially, as the tech sector goes into a peak production month, we will see continued month-on-month growth in the electronics sector," said Song Seng Wun, an economist at CIMB-GK Research.
The government has said it expects economic growth to moderate in the second half of the year in line with global trends. Analysts say a slower US economy could hit Singapore's important tech sector.
The closely watched US Semiconductor Equipment and Materials International (SEMI) book-to-bill ratio, which slipped to 1.06 in July, could be the surest sign that demand in the tech sector is slowing, analysts say.
"For now, the electronics sector is still doing pretty well," said Joseph Tan, an economist at Standard Chartered. "But all recent data seem to suggest that the visible moderation in the tech sector will come in the fourth quarter." However, most economists are expecting a shallow, rather than a sharp, downturn in the electronics sector.