Industry Overview: Singapore Industrial Sourcing Guide 2014

Moving Forward to a Qualitatively Better Productivity

The year 2013 generally saw a weaker development in advanced global economies – notably weaker than was foreseen. The US with its unsolved fiscal impasse and the weak domestic demand in Europe proved to be one of the contributing factors. The Singapore economy is also expected to show a slow recovery of 3.5 to 4 per cent in 2013. Gradual growth of 2 to 4 per cent is also to be expected in 2014.

Despite the expectations of a slower but qualitatively better growth, Singapore continues to take the top spot in The World Bank’s Ease of Doing Business report. A high ranking on the ease of doing business index denotes that the regulatory environment is more conducive to the starting and operation of a local firm. Singapore is also ranked as the second most competitive economy in the world on the Global Competitiveness Index 2013–2014 rankings, scoring high in the areas of economic performance, government efficiency, business efficiency and infrastructure.

State of the Manufacturing Industry in 2013

Based on the Ministry of Trade and Industry’s (MTI) advance estimates, it expects the Singapore economy to grow by 3.5 to 4 per cent in 2013, and 2 to 4 per cent in 2014.

On a year-on-year basis, the Singapore economy grew by 5.8 per cent in the third quarter of 2013 as compared to the 4.4 per cent growth in the preceding quarter. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew at a slower pace of 1.3 per cent, after expanding 17.4 per cent in the previous quarter. Although all major sectors registered positive growth, it was the externally-oriented sectors such as the finance and insurance, wholesale and retail trade, and manufacturing sectors which supported the growth expanding by 11 per cent, 7.9 per cent and 5.5 per cent respectively on a year-on-year basis. The manufacturing, finance and insurance, and wholesale and retail trade sectors added 1.4, 1.3 and 1.2 percentage points to the overall GDP growth, respectively.

The manufacturing sector, which registered an expansion of 5.5 per cent, was supported primarily by growth in the electronics and transport engineering clusters. The overall manufacturing output was higher than the 1.3 per cent expansion in the previous quarter. All the clusters showed output growth except for the biomedical manufacturing and precision engineering clusters.

Transport Engineering and Aerospace

The transport engineering cluster showed a strong growth of 17 per cent, a reversal from the contraction seen in the previous two quarters of 2013. The growth in this cluster was driven by the marine and offshore engineering segment, which surged by 21 per cent due to higher contributions from rig building and ship conversion projects. Another segment that also showed notable expansion is the aerospace segment which registered a robust 12 per cent expansion.


The electronics cluster increased by 9.7 per cent, which is a strong pickup from the 1.9 per cent expansion in the previous quarter. The growth was supported by semiconductors and computer peripherals segments, which increased by 12 per cent and 24 per cent respectively.


The chemicals cluster expanded by 3.9 per cent, supported by growth in all the segments. Specifically, the petrochemicals segment grew by 7.4 per cent on the back of an increase in production capacity.

General Manufacturing

The general manufacturing cluster increased by 2.0 per cent, a growth supported by the miscellaneous segment, which expanded by 7.7 per cent due to higher output of construction-related products. By contrast, the food, beverages and tobacco and printing segments contracted by 2.3 per cent and 5.3 respectively.

Biomedical Manufacturing

On the other hand, the biomedical manufacturing cluster contracted by 1.0 per cent. The cluster was weighed down by the 2.4 per cent decline in the pharmaceuticals segment. The medical technology segment fared better with a 6.2 per cent expansion.

Precision Engineering

The precision engineering cluster decreased by 5.4 per cent. To be more specific, the machinery and systems segment contracted by 8.3 per cent because of weak export demand for semiconductor-related equipment. The precision modules and components segment also declined by 1.9 per cent.

Looking Back

During the colonial period, Singapore functioned more as a trading centre rather than a manufacturing base, and much of the country’s early commerce centered around entrepôt trade. In the late 1800s, it was the discovery of tin and growth of rubber that spurred the manufacture of tin and rubber related products. From 1900 to 1942, small manufacturing industries that produced products such as toys, tobacco, oil products, matches, pottery, hats, cements, cigarettes and others started to flourish in Singapore.

By 1945 to 1960, more products were manufactured for local consumption to meet post-war demands; and by 1930 to 1970, the focus was on labour-intensive and low-value industries. From the 1970s to 2000s, Singapore’s government led economic planning and growth with industries moving up the value-add chain through strengthening of technology.

The rich and colourful history of Singapore’s manufacturing industry will be celebrated by the National Heritage Board (NHB) in an exhibition that is slated to open in mid-2014. Fifty made-in-Singapore brands will be showcased, as a result of a research project that aimed to trace the rise of Singapore’s manufacturing industry.

Celebrating Singapore’s Best in 2013

In 2013, various manufacturing companies received prestigious awards given out by established local award-giving bodies. Among the anticipated awards is the Asian Manufacturing Awards. The Asian Manufacturing Awards was conceived and inaugurated in 2012 by Contineo Media’s Manufacturing Group as a platform to recognise companies providing industrial technology solutions and value-added services that are enabling companies in Asia to develop and sustain the high levels of manufacturing performance increasingly required to effectively compete on both the regional and world stages. Emerson Process Management, Honeywell, Siemens, Mitsubishi Electric, APL, Agility, DHL Express, Tate & Lyle, Online24, Konica Minolta and Schaefer Systems are among those honoured at this year’s Asian Manufacturing Awards.

The Singapore Workforce Development Agency (WDA) and Singapore

Manufacturing Federation (SMF) presented the third WDA-SMF Productivity & Innovation Awards at the Grand Copthorne Waterfront Ballroom on 25 October 2013. This nationally-recognised award is presented to those who have achieved substantial results in the WSQ Certified Productivity and Innovation Manager (CPI Manager) and SME Quality Initiatives to Assist, Nurture and Grow (SME QIANG) programmes. The Gold Award under the WSQ Certified Productivity and Innovation Manager (CPI Manager) programme went to Singapore Technologies Marine Ltd, is a premier shipyard providing turnkey shipbuilding, ship conversion and ship repair services. Meanwhile, Horsburgh Engineering (F.E.) Pte Ltd won the Gold Award under the SME QIANG programme.

To honour companies who promote environmental initiatives and awareness within their organisation, the Singapore Environmental Achievement Awards (SEAA) was launched by the former Minister for the Environment, Mr Yeo Cheow Tong, in 1997. The 2013 SEAA awards ceremony was held on 22 August 2013 the Conrad Centennial Singapore, with Dr Vivian Balakrishnan, Minister for the Environment and Water Resources as the Guest-of-Honour.

Companies that are recognised by the SEAA join an elite pool of organisations from the region that have affirmed their commitment to environmental excellence and protection of the natural environment.

Notable winners include KUB-Berjaya Enviro Sdn Bhd, Institute of Technical Education, Keppel Land Limited, Woodgrove Secondary School, YTL Corporation Bhd, Asia Pacific Breweries Singapore, Greenpac and Gammon Pte Ltd.

On 1 November, the Singapore Furniture Industries Council (SFIC) announced the winners of the Singapore Furniture Industry Awards (SFIA) 2013. The SFIA is designed to honour outstanding industry individuals and enterprises that have displayed the spirit of entrepreneurship and made significant contributions to the furniture industry in Singapore. SFIA is supported by DesignSingapore Council, International Enterprise (IE) Singapore and SPRING Singapore. Award categories under SFIA 2013 include The Furniture Manufacturer Award, The Furniture Retailer Award, The Interior Builder Award, The New Entrant Award, The Outstanding Individual Award and the Hall of Fame Award.

Working Towards Development

Various organisations in Singapore have launched productivity initiatives, schemes and partnership events to help those within their industry.

The Singapore Manufacturing Federation (SMF), formerly known as the Singapore Manufacturer’s Association, was first established in 1932 with the main aim of championing the interest of Singapore’s manufacturing sector, drive its competitiveness and sustainable growth through serving industry-specific needs.

The Association of Electronic Industries in Singapore (AEIS) also has a roster of relevant, international trade shows. AEIS is a non-profit organisation that represents all facets of the electronics and supporting services industries, covering manufacturers of industries electronics, electronic components and consumer electronics products as well as industrial companies associated with the electronics industry.

The Singapore Association for Convention and Exhibition Organisers and Suppliers (SACEOS), has started two major initiatives to tap talent and business sources in Singapore. Since 1979, SACEOS has been contributing significantly in making Singapore the best event venue for Asia.

Other influential associations are the Singapore Business Federation (SBF) – the apex business chamber which champions the interests of the Singapore business community in trade, investment and industrial relations; the Singapore Association of Pharmaceutical Industries (SAPI) – which aims to supports legislation that seeks to improve the pharmaceutical trade in Singapore, represents its members to the government on issues regarding laws/regulations that pertain to the pharmaceutical industry, and assists members in solving their problems in the industry like parallel imports, counterfeit products and patent infringements, among others; and the Singapore Semiconductor Industry Association (SSIA) – the voice of Singapore’s semiconductor industry.

Unified, these Singapore organisations will ensure the continued rise of Singapore’s manufacturing industry.

2014 Outlook

According to MTI, the global economic outlook is expected to grow modestly in 2014. The growth outlook for the Singapore economy also remains modest. Externally-oriented sectors such as manufacturing and transportation & storage are likely to provide support to growth, in line with the recovery in global demand. However, some labour-intensive domestically-oriented sectors may see their growth weighed down by tightness in labour market conditions.

Despite this, there is still a degree of uncertainty. In the US, the eventual tapering of QE3 and the debt ceiling issue might affect markets. In Europe, there could be a recurrence of sovereign debt crises in the peripheral economies. In China, policy adjustments to rebalance the economy might lead to unintended consequences of a sharper-than-expected slowdown in growth. Should any of these risks occur, Singapore’s trade forecasts would be lowered.

Another factor is the very slow recovery of the Eurozone economy, which is expected to grow by 1 per cent in 2014, after an expected 0.4 per cent decline in 2013. Most Asian economies, however, are expected to grow in 2014 at a slightly faster pace than 2013.

Sources: International Enterprise (IE) Singapore and Ministry of Trade and Industry (MTI) Singapore. For more information, please visit IE Singapore’s website at or MTI’s website at