Manufacturing Sector Pulls Singapore Out Of Economic Sluggishness
Singapore’s economy showed signs of improved momentum as it grew 1.6 percent on-year during the first quarter, driven by the upswing in the manufacturing sector. The sector surged by 19.8 percent growth on a quarter-on-quarter basis, recovering from the 11.1 percent slump during the previous quarter.
The manufacturing industry shares 20-30% or a quarter of Singapore’s GDP, translating to SGD 60,000,000 to SGD 80,000,000 annually. The sector, which was composed of the marine, chemicals, precision engineering, electronics, and pharmaceutical industries, remained resilient last year amid the ripples of the global financial crunch.
Preliminary estimates by Singapore’s Ministry of Trade and Industry reflected a softer growth for the said industry in 2012 due to a sluggishness in the electronics sector. The slowdown can also be attributed to deteriorating external conditions that involve a weakened demand for electronics in the US and Europe export markets.
The chemicals cluster of the manufacturing industry is anticipating an increase in output as plants that have been shut down last quarter due to regular maintenance will be back to its daily operations. The transport engineering and biomedical clusters also expect a higher output in the next quarter.
These clusters have propelled the rebound of Singapore’s manufacturing industry, pulling Singapore from a 2.0 percent contraction in the previous quarter.
Risks, however, remain and may affect the continuity of the economic recovery, said the Ministry of Trade and Industry. Singapore has maintained its GDP forecast at one to three percent due to the uncertain economic and political conditions overseas.
Singapore’s economy grew by 4.9 percent last year. On a quarter-on-quarter basis, Singapore’s GDP grew by 9.9 percent. Because of this growth, Singapore has, in fact, avoided a technical recession, which is defined as two successive quarters marked by a decline in national output.
With Singapore headed in the right direction, high-value investments in the manufacturing sector are anticipated to expand further. Singapore’s conducive business environment also points toward the establishment of more start-up companies as well as long-term job generation.