Business prospects in Singapore manufacturing sector

 Business sentiments in the manufacturing sector are expected to remain positive for the period April to September 2011 compared to the first quarter of 2011, according to the Singapore Economic Development Board (EDB).
 The latest survey showed a weighted 19% of manufacturers expecting business conditions to improve, while a weighted 7% foresee deterioration. Overall, a net weighted balance of 12% of manufacturers anticipate a more favourable business situation in the next six months ending September 2011 compared to a quarter ago. However, this sentiment is weaker than the net weighted 20% recorded a quarter ago due to high oil prices and uncertainties in global economic conditions.
 "Manufacturing is a key pillar of Singapore's economy. Our economy's expansion of 14.5% last year was largely driven by the manufacturing sector, which rebounded by 29.7% due to a surge in electronics and biomedical output. Manufacturing will continue to play a key role by contributing 20 to 25% of Singapore's GDP," said EDB.

 Metalworking
 In Singapore, the agency explained the machinery and systems sector performed well with a strong rebound from the downturn, growing 62% year-on-year in 2010. The global demand for machine tools, in particular, is projected to grow at around 6% annually, with Asia making up 60% of demand by 2014.
 "We will, therefore, continue to see interest from companies in leveraging Singapore as a base to meet their customers' needs in Asia," stated EDB.
 "Our industry sectors are seeing an increasing need for complex manufacturing capabilities. For industries such as complex equipment, aerospace and oil & gas, precision metalworking know-how and skills are crucial to achieving quality and tolerances demanded by the end users. As such, companies with the prerequisite expertise in these areas will be able to serve an increasing number of sophisticated customers with complex products and challenging manufacturing problems. For example, the presence of leading complex equipment manufacturers like Applied Materials and Makino will create positive spin-offs for our metalworking industry," added the agency.
 When asked what foreign investors/metalworking end-users/ machine tool manufacturers expect from Singapore's manufacturing business, EDB said beyond production of equipment, machine tool companies are also using Singapore as a location to serve customers in the region with an expanded range of activities.
 "In 2009, for example, Japanese machine tool maker Makino set up its International Research and Development Centre in Singapore to create customised product designs for the needs of emerging markets in Asia. Research work includes areas such as medical, engineering, alternative energy, and in areas of nanotechnology using exotic and composite materials. We will continue to improve Singapore's business environment and logistics infrastructure so that investors will find it easy to use Singapore as their base to spearhead Asian growth," described the agency.
 About 72% of manufacturers plan to invest in plant and machinery in the next twelve months (April 2011 - March 2012) compared to the past twelve months, of which a weighted 59% expect higher or similar levels of capital expenditure. The planned investments are mainly for the replacement of worn-out equipment, expansion of production capacity of existing products and the installation of new production technology. 
  The Singapore Economic Development Board (EDB) is the lead government agency for planning and executing strategies to enhance Singapore's position as a global business centre.
Tel: +65-683 26229
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Website:www.sedb.com