Manufacturing Growth Forecast For Singapore Drops Significantly
Economists have become largely pessimistic of growth in Singapore's manufacturing industry. The bearish forecasts were based on increasing trade protectionism around the world, particularly in the United States.
In a survey released on Wednesday by the Monetary Authority of Singapore (MAS), it was indicated that economic experts are expecting the manufacturing sector to slump by 0.2 percent, the Straits Times reported.
The previous estimation made in March was at two percent, indicating that forecasts were largely affected by the Singaporean Trade and Industry Ministry's prediction of slower economic growth for 2019.
Economists noted that the global economic slowdown and the China-U.S. trade war will affect this year's developments in various sectors. Furthermore, uncertainties regarding trade protectionism in other countries, particularly the United States, will have an impact on growth.
Last month, multiple outlets confirmed that the city-state's factory activity slipped for the first time in three years. The Purchasing Managers' Index in Singapore saw a 0.4 percent decline in May, as confirmed by the Singapore Institute of Purchasing and Materials Management (SIPMM) last week.
Despite increasing pessimism for Singapore's manufacturing businesses, the MAS survey suggested that many economists have faith in the construction sector. They predicted that growth will hit 3.5 percent this year. The March figures stood at 2.1 percent.
In a report on the Asia Pacific region's construction market growth released on Wednesday, it was indicated that Singapore is among the key players that will drive infrastructure activities in the region this year.
Other strong players are China, Indonesia, Myanmar, and the well-recognized winner in the Sino-U.S. trade war, Vietnam. Researchers said visible action in infrastructure spending will boost the countries' construction sectors and other related segments.
Meanwhile, another report revealed that there were 3,230 employees cut off from the Singaporean workforce during the first quarter of this year. The biggest climb was noticeable in manufacturing firm layoffs.
The report noted that in the same quarter of 2018, there were only 380 layoffs in the sector. This year, the numbers expanded significantly to 1,040. Most of the layoffs were done under the electronics and production segments.
The Ministry of Manpower's Labor Market Report First Quarter 2019 clarified that the retrenchments were made due to restructuring tasks necessary for the companies that had to lay off employees.
Among the workers that made up for the biggest chunk of the layoffs at 69 percent were PMETs or professionals, managers, executives, and technicians. Only 13.1 percent of the retrenched employees were under production and other arms.
It has yet to be revealed if the forecasts on Singapore's manufacturing industry will improve if global trade tensions ease and demand from manufacturing plants increase during the second quarter.