How is Singapore’s Manufacturing Industry in 2021?

Although the Covid-19 pandemic is not over yet, business optimism in Singapore’s manufacturing industry continues to increase, with more companies seeing better conditions this year. In fact, by the start of the year, the manufacturing industry accounted for about 21 percent, or about $106 billion of total GDP, employing nearly 450,000 workers, or about 12 percent of the workforce. 

If you plan to incorporate a company in the manufacturing industry, this year could be a great onset to accomplish your goal. But, before proceeding to your manufacturing company establishment, you can read this article to help you learn about the prospect of the manufacturing sector in Singapore this year. 

Growth in Singapore’s Manufacturing Industry and Its Clusters

Despite the challenges of the pandemic, the manufacturing industry expanded for the sixth straight month from July to December last year. Moreover, experts have said the sector will continue to be a key driver of Singapore’s economic growth this year.

According to Singapore’s Trade and Industry Minister, Chan Chun Sing, the Covid-19 pandemic has underscored the importance of the manufacturing sector to the country’s economy. Mr. Chan noted that the performance of the biomedical electronics and precision engineering sub-sectors was a bright spot last year, as demand for their products increased at the height of the pandemic

In January 2021, alone, the output of the precision engineering cluster expanded by 15.3%. 

This is thanks to the higher production of semiconductor equipment driving the engine & systems segment by 20.2%. 

In the same regard, the general manufacturing sector saw its output rise 3.3% in early 2021. This follows a 7.6% growth in the miscellaneous industry segment, which benefited from higher apparel and battery production. 

Overall, as reported by the Singapore Economic Development Board (EDB), all clusters in the manufacturing sector are expected to remain optimistic in the second quarter of this year.  This optimism is led by electronics, with a net weighted balance of 66 percent seeing a positive business outlook, followed by biomedical manufacturing with a net weighted balance of 32 percent being favorable.

For additional information on the improvement of the net weighted balance of all manufacturing clusters, please refer to the table below.

Source: Singapore Economic Development Board, Department of Statistics

Note:

The net weighted balance is the share of companies expecting things to improve, minus the share of companies expecting things to worsen.

A 10-Year Plan to Grow the Manufacturing Sector

In order to raise the global competitiveness of the manufacturing sector, the Ministry of Trade and Industry has developed a 10-year plan. The plan is to grow the manufacturing industry by around 50 percent in 2030, which is the same pace of growth as the last ten years. 

As stated by Mr. Chan, For the manufacturing sector to reach its 2030 goal, it must develop its competitiveness through its ability to innovate quickly and produce higher-value products, not through lowering production or labor costs. To accomplish this, the government has outlined a three-pronged strategy:

1. Attracting the best global and local companies

First, the government has aimed to attract the best global and local companies in specific areas that will help Singapore remain a critical node in the global value chain. Mr. Chan noted that Singapore is a key manufacturing location for some of the world’s largest semiconductor companies, such as Micron and Infineon – both of which are among the world’s most advanced manufacturers. He also added that the government aspired to do much better by enticing more companies within the same league as those frontier companies. 

 2. Creating better job opportunities for Singaporeans

The second strategy is to increase the effort to grow the size and capability of local companies in advanced manufacturing to create better job opportunities for Singaporeans. Profitable enterprises will be offered tailored support through various programs, such as Scale-Up SG, a two-and-a-half-year program that helps flourishing local enterprises expand.

The government will also provide the Global Innovation Alliance, a network of Singapore and overseas partners in key innovation centers and critical demand markets, enabling local companies to collaborate with leading manufacturing companies.

3. Encouraging students to take up degrees in engineering and manufacturing 

 Lastly, the government will work with polytechnics and universities to attract students to major in engineering and manufacturing. According to Mr. Chan, manufacturing is no longer about repetitive tasks performed in a structured environment. In fact, today’s most significant challenge for the advanced engineering and manufacturing sectors is how quickly companies are able to innovate and prototype new products and services.

Mr. Chan also noted that the government will keep improving the skills of older workers in the sector with the help of trade associations and chambers such as the Singapore Manufacturing Federation.

Furthermore, the Industry Transformation Maps (ITMs) will support the 10-year plan by working in a more targeted manner for specific industry sub-sectors. So far, there have been 23 ITMs established, including those for five manufacturing sub-sectors: energy and chemicals, precision engineering, marine and offshore, aerospace and electronics.

Conclusion

The Covid-19 pandemic is not quite over yet, but Singapore’s manufacturing industry continues thriving this year and is expected to keep growing in the next few years. The government has made strenuous efforts to raise the global competitiveness of the manufacturing sector and will most likely come up with new programs to maximize the sector’s growth. That being the case, entrepreneurs looking to set up manufacturing firms in the city-state can hope for a bright future. 

Apart from incorporating a manufacturing company in Singapore, Biz Atom can help ensure that your business requirements are met at every stage. Through excellent advice and services, our professional team is here to help you improve your business and grow. Feel free to get in touch with us anytime!

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