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Singapore's Producer Prices Accelerate in May Amid Growing AI Demand

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Singapore's Producer Prices Accelerate in May Amid Growing AI Demand

Singapore's producer prices continued their year-on-year growth trajectory in May, driven by sustained demand for artificial intelligence infrastructure, among other factors.

The Singapore Manufactured Products Price Index jumped 30.8% year on year in May 2026, accelerating from the 27.5% annual growth recorded in April. It missed the Trading Economics forecast for a 35% growth.

The Domestic Supply Price Index climbed 34.2% from a year earlier, quickening from the 32.1% year-over-year expansion seen the previous month, according to the Department of Statistics Singapore on Monday.

However, minor cooling was observed on a seasonally adjusted basis. On a month-over-month basis, the manufactured products index slipped 0.2%, reversing the 6.7% expansion in April, while domestic supply prices pulled back 1.9% following April's 3.4% rise.

The year-over-year comparisons were influenced by global energy prices. The oil index within the manufactured products price index climbed 58.8% year over year, while the oil metric under domestic supply surged 77.2%.

Stripping out volatile fuel components, underlying non-oil indices still moved up substantially, rising 26.8% for manufactured products and 21.8% for domestic supply.

Higher factory-gate prices for electrical machinery apparatus and precision parts also served as primary drivers bolstering non-oil metrics, reflecting sustained global deployment of AI and semiconductor capabilities.

Recent data from Enterprise Singapore showed non-oil domestic exports (NODX) jumping 38.4% year over year in May, led by a 94.8% electronics boom.

However, actual physical manufacturing volumes showed signs of easing. Data from the Singapore Economic Development Board showed that industrial factory output growth moderated to 13.0% year over year in May from 16.5% in April, as deep pharmaceutical and chemical supply chain disruptions partially offset the output surge across the electronics cluster.

In order to adapt to the growing AI demand, the government finalized its Economic Strategy Review (ESR) blueprint last week. Initially commissioned in August 2025, the Ministry of Digital Development and Information (MDDI) report outlines targeted job transformation frameworks to help local enterprises capitalize on rapid automation.

The report highlighted: "We should position Singapore as a trusted hub where AI solutions are developed, tested, and deployed to tackle real-world problems at scale."

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