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Singapore's manufacturing output up 12.6% in February

SINGAPORE: Singapore’s manufacturing output in February rose 12.6 per cent from a year ago, on the back of strong growth in the electronics and precision engineering clusters.

Excluding the more volatile biomedical manufacturing cluster, output grew 17.1 per cent, according to data released on Friday (Mar 24) by the Singapore Economic Development Board (EDB).

On a month-on-month seasonally-adjusted basis, industrial production fell 3.7 per cent in February, it added. 

Output of the electronics cluster jumped 39.8 per cent on-year last month, mainly due to robust growth of 63.6 per cent in the semiconductors segment. The other electronic modules and components and infocomms and consumer electronics segments also grew 16.5 per cent and 8.3 per cent respectively. 

The output of the precision engineering cluster also expanded 26.2 per cent over the same period, with the machinery and systems segment posting strong growth of 33.2 per cent on the back of higher export demand for semiconductor-related equipment. The precision modules and components segment also grew 16.4 per cent with higher output of dies, moulds, tools, jigs and fixture, optical instruments and metal precision components. 

There were also increases in output in the general manufacturing industries cluster (3.3 per cent) and chemicals cluster (1.9 per cent), but declines in the biomedical manufacturing cluster (-2.6 per cent) and transport engineering cluster (-9.6 per cent). 

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Singapore's consumer prices rise for third consecutive month

SINGAPORE: Consumer prices in Singapore rose for the third straight month in February, due in part to increases in transport and education costs. 

The consumer price index (CPI) – a key measure of headline inflation – rose 0.7 per cent in February from a year ago, up from the previous month’s 0.6 per cent, according to figures from the Department of Statistics on Thursday (Mar 23). 

This was mainly due to year-on-year increases in costs related to transport (4.2 per cent), education (3.6 per cent) and healthcare (2.6 per cent). 

However, there were drops in the prices for housing and utilities (-3.1 per cent), miscellaneous goods and services (-0.6 per cent) and clothing and footwear (-0.2 per cent). 

Consumer prices rose for the first time in December 2016 after a record two years of negative inflation.

MAS Core Inflation, which excludes the cost of accommodation and private road transport, rose 1.2 per cent year-on-year in February, slightly lower than the previous month’s 1.5 per cent.

Looking ahead, MAS Core Inflation is expected to average 1–2 per cent for the whole of 2017, compared with 0.9 per cent in 2016. CPI-All Items inflation is projected to pick up to 0.5–1.5 per cent this year, from -0.5 per cent in 2016.

“The firmer rate of inflation in 2017 largely reflects the contribution of energy-related components, as well as some administrative price increases, rather than generalised demand-induced price pressures,” MAS and MTI said.

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Analysts boost Singapore's 2017 growth forecast to 2.3%: MAS survey

SINGAPORE: Analysts have boosted their growth forecast for Singapore’s economy for 2017 to 2.3 per cent, up from 1.5 per cent, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Mar 15).

This reverses a trend of declining expectations in the industry. Economists had forecast growth of 2.5 per cent in 2017 in March last year, then 2.1 per cent, 1.8 per cent and 1.5 per cent respectively in the following quarters. The Government has forecast 1 per cent to 3 per cent growth for the year. 

The economy expanded by 2 per cent in 2016, above the forecasted 1.4 per cent. This was mostly due to a better-than-expected showing of 2.9 per cent in the fourth quarter, above the median forecast of 0.8 per cent in the last survey. 

For the first quarter of this year, survey respondents had a median expectation of 2.6 per cent growth. They also projected growth of 2.4 per cent in 2018. 

Analysts were bullish about the performance of the manufacturing sector, forecasting growth of 4.5 per cent compared to 1.1 per cent in the previous survey. Their expectations for finance and insurance, as well as wholesale and retail trade, also edged up slightly from 1.8 per cent to 2 per cent and from 1 per cent to 1.1 per cent respectively. 

However, forecasts for the construction sector were much lower than the previous survey, plunging from 2.4 per cent to 0.3 per cent. Economists also were less optimistic about the accommodation and food services sector, revising the growth forecast for 2017 from 1.7 per cent to 1.3 per cent. 

INFLATION FORECAST AT 1% FOR 2017

Inflation for the year is expected to come in at 1 per cent, unchanged from the analysts’ forecast in the previous survey. For the first quarter of this year, inflation is expected to be 0.8 per cent.

Core inflation – which excludes accommodation and car prices – is expected to be 1.5 per cent for the whole year, slightly above the 1.3 per cent predicted in the previous survey. It is also predicted to come in at 1.3 per cent for the first quarter.

For 2018, headline inflation is expected to be 1.3 per cent while MAS core inflation is forecast at 1.7 per cent.

Economists polled said they expected the unemployment rate to be 2.4 per cent at year-end, unchanged from the previous prediction in December. 

The MAS Survey of Professional Forecasters is conducted every quarter after the release of detailed economic data for the preceding three months. The median forecasts in the latest report were based on the estimates of 23 economists, MAS said.

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Singapore's manufacturing output up 2.2% in January

SINGAPORE: Singapore’s manufacturing output in January rose 2.2 per cent from a year ago, on the back of strong growth in the precision engineering and electronics clusters.

Excluding the more volatile biomedical manufacturing, output grew 7 per cent, according to data released on Friday (Feb 24) by the Singapore Economic Development Board (EDB).

On a month-on-month seasonally-adjusted basis, industrial production fell 6 per cent in January, it added. 

Output of the precision engineering sector grew 24 per cent on-year last month, with the machinery and systems segment posting 40.3 per cent growth mainly due to higher export demand for semiconductor-related equipment, EDB said. 

The output of the electronics sector also climbed 14.8 per cent over the same period, with the semiconductors and computer peripherals segments growing 25.8 per cent and 3.7 per cent respectively. However, the other segments registered declines, the agency said.

The chemicals cluster’s output grew 3.5 per cent year-on-year last month, and the growth was led by the petroleum (20.7 per cent) and petrochemicals (17.4 per cent) segments due in part to the low base last year when there were some plant maintenance shutdowns. 

Additionally, declines were seen in the transport engineering (3.8 per cent), biomedical (13.5 per cent) and general manufacturing industries (13.8 per cent) clusters, EDB figures showed. 

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Singapore's tourism numbers hit historic high in 2016

SINGAPORE: Singapore’s tourism sector thrived last year despite challenging economic conditions, with both visitor arrivals and tourism receipts exceeding forecasts to hit historical highs, according to figures released by the Singapore Tourism Board (STB) on Tuesday (Feb 14).

Visitor arrivals grew 7.7 per cent to 16.4 million in 2016, driven by absolute growth in key markets where STB had been intensifying marketing efforts, the agency said during its press briefing on Tuesday. For instance, there were 36 per cent more visitors from China, while Indonesia and India saw 6 per cent and 8 per cent growth respectively. 

Meanwhile, tourism receipts rose 13.9 per cent to S$ 24.8 billion on the back of food and beverage, shopping and accommodation spending, the agency said. 

STB has also been promoting Singapore as a destination for business tourism, supporting more than 410 business events last year – 15 per cent more than the year before.

These events contributed 343,000 to visitor arrivals and generated approximately S$ 611 million in tourism receipts, it added. 

STB’s chief executive, Lionel Yeo, said the agency was “heartened” by the strong tourism sector performance in 2016.

“Despite challenges such as a weaker economic performance in some of Singapore’s top source markets and a Zika virus outbreak, Singapore has managed to attract more quality visitors to contribute to economic growth.”

The statutory board has implemented a slew of measures in the past two years to raise tourist numbers, including a S$ 20 million global campaign to attract more visitors in 2015, as well as restructuring to improve the productivity of the hotel and travel agent industries. 

STB also supported a total of 52 technology-related projects through funds to help industry stakeholders improve their operations.  

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CFE report maps out blueprint for Singapore's future: What you need to know

SINGAPORE: An economy that remains open and well-connected to the world, a working population equipped with deep skills and a lifelong learning attitude, and companies scaling up through innovation – these are the key features of how a future-ready Singapore looks like in the eyes of a 30-member committee tasked to chart out the country’s longer-term growth path.

To achieve that, the Committee on the Future Economy (CFE), which is made up of five Cabinet ministers and 25 members from the private sector, laid out seven recommendations on Thursday (Feb 9) after a year of deliberations. The recommendations, if well-implemented, should help the economy to grow an average of 2 to 3 per cent per year, the report said.

With the Singapore economy trudging through a frosty environment of slower growth, some may have high hopes for the CFE’s recommendations to be an antidote for the slackening economy. However, observers have said the report, with its focus on longer-term economic transformations, was never meant to be a quick miracle pill.

In fact, economists who Channel NewsAsia spoke to described the CFE’s proposals as having few surprises. For one, the wheels of the Industry Transformation Maps (ITMs) – a S$ 4.5 billion programme to promote growth and competitiveness in 23 industries that was first announced in last year’s Budget – are already in motion.

“This report isn’t a big surprise and you may even say it’s underwhelming primarily because economic adjustments have been taking place all these while,” said CIMB economist Song Seng Wun. “But that’s how the Government works. It doesn’t do nothing in between these development reports … so this latest one seems like a look back at what has been done so far and a look ahead on what should be continued or started.”

Following the unveiling of the report, Prime Minister Lee Hsien Loong said the Government will pursue all the strategies proposed and added that the publication of the report marks “the beginning of another chapter of the Singaporean story”.

So, what does this “new chapter” mean for the average Singaporean worker and homegrown businesses, and how will it pan out for the wider economy? Channel NewsAsia takes a closer look.

WHAT IT MEANS FOR WORKERS

Amid a fast-changing labour market upended by rapid technological disruption, as well as an ageing and shrinking workforce, Singaporeans will need to embark on a lifelong learning journey to seek deeper skills in order to stay competitive.

With regard to that, the CFE suggested that more needs to be done on the back of the national SkillsFuture movement, such as introducing more modular courses for working adults; setting up an online one-stop education, training and career guidance portal; as well as encouraging companies to promote employees based on skills. 

These initiatives may lend a helping hand to workers who have found it difficult to keep up with the swift changes in skillset requirements, in particular middle-aged Singaporeans.

“Over the last few years, we’ve had a rapid change in skillsets. In the meantime, sub-par global growth has also made the transition for workers who may have been retrenched even more challenging … so the adjustment of expectations and skillsets for this group will take some time,” Mr Song said.

Most importantly, the CFE’s recommendations aim to drive home the message that “a lot of changes are taking place so please stay on top of these developments”, he added.

Nomura economist Brian Tan cited a recent report by the Ministry of Manpower (MOM) that highlighted the urgency for the local workforce to keep up. The report, which was released on Feb 7, showed that as the economy restructures, nearly half of the job vacancies in Singapore last year were for professionals, managers, executives and technicians (PMETs).

“The report showed a lot of vacancies for PMETs but people just do not have the skills to enter those industries. As a workforce, if we remain inflexible and unadaptable, we will have problems as the world changes,” he explained.

WHAT IT MEANS FOR BUSINESSES

For businesses, ramping up innovation remains the key to staying relevant and to promote that, the CFE suggested strengthening Singapore’s intellectual property (IP) ecosystem and providing more support for local entrepreneurs.

High-growth enterprises that display strong growth potential should also receive more targeted support, including access to networks, mentors, technology and financing, to scale up and venture abroad.

According to CIMB’s Mr Song, this serves as a call for homegrown firms to set their sights high and far. “This is a reminder that despite protectionism, there are many markets that remain open to trade in goods and services, so going abroad will bring opportunities.”

“More importantly, you can now reach an external market without having to leave Singapore because of technology. The global market can be a click of the button away now that technology has changed the landscape and we no longer need to be constrained by borders,” he added.

And even as the relentless pace of technological change has disrupted business models in sectors such as transport, the digital economy also throws up economic opportunities. Apart from suggesting further boosts to the local start-up ecosystem, the committee also suggested help be given to small and medium enterprises (SMEs) for the adoption of digital technologies.

This recommendation of expertise and financial support for SMEs, which form the bulk of local enterprises, suggests a “more micro approach” that may help SMEs to build up stronger digital capabilities faster, said Nomura’s Mr Tan. “While the talk of digitisation is nothing new, the report seems to be taking a much more micro approach than the previous set of suggestions under the Economic Strategies Committee (ESC).”

He added: “It’s one thing to talk about becoming a Smart Nation and wanting firms to go digital but it’s another to talk about what it really looks like. I think the report gives a roadmap on how to get to that point, like the mention of a ‘Digital Harbour’, and these are ideas to get more SMEs to digitise, which will help them improve productivity.”

WHAT IT MEANS FOR THE ECONOMY

The support for businesses to venture abroad echoes the committee’s broader view for Singapore to resist rising protectionist sentiment around the world. As the country embarks on its next phase of growth, the report noted that Singapore will have to continue deepening links with overseas partners and seek opportunities in new markets.

Apart from innovative companies and people in the US and Europe, there is also strong potential in many Asian markets such as Southeast Asia, China, India and emerging markets, according to the committee.

Given Singapore’s position as an open and trade-dependent economy, economists like OCBC’s head of treasury research and strategy Selena Ling said that this strategy to remain plugged in global trade is “to a large extent inevitable”.

She said: “Singapore will essentially have to continue to keep up a brave front and push on with free trade and investments, notwithstanding the US pushback on TPP (Trans-Pacific Partnership) post-Trump. This is to a large extent inevitable because Singapore remains a small and open economy with no economic hinterland market.

“As such, Singapore remains committed to a rules-based trading system and will continue to work with like-minded partners to pursue the liberalisation of trade and investments.”

Meanwhile, the manufacturing sector – a key cornerstone of the local economy – is also here to stay.

The CFE recommends building a globally-competitive manufacturing sector, at around 20 per cent of GDP, over the medium term. Apart from targeting advanced manufacturing activities, Singapore could encourage the “growth of areas that sit at the confluence of high-tech manufacturing and high-end services such as advanced manufacturing and the Industrial Internet of Things”, its report said.

For OCBC’s Ms Ling, the “servicisation of manufacturing” such as design, research and development, marketing and after-sales services could be an area where Singapore can develop a niche and competitive edge over other low-cost manufacturing bases in the region.

Overall, economists told Channel NewsAsia that the committee’s growth target is a “manageable” one.

UOB’s senior economist, Alvin Liew, noted that the target of 2 to 3 per cent growth is a “significant markdown” from the 3 to 5 per cent target set previously in the ESC.

“In the past, the 3 to 5 per cent was to be supported by 1 to 2 per cent labour supply growth and 2 to 3 per cent labour productivity growth. Although we managed the former, our labour productivity grew an average of zero per cent since the 2011 General Election.

“The CFE’s GDP target thus lowers public expectations and implies 1 per cent labour supply growth with a 1 to 2 per cent labour productivity growth, which is much more manageable,” he said.  

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Singapore's December manufacturing output jumps 21.3% from previous year

SINGAPORE: Singapore’s manufacturing output in December surged 21.3 per cent from a year ago, on the back of strong growth in electronics and pharmaceuticals output.

Excluding the more volatile biomedical manufacturing, output grew 16.1 per cent, according to data released on Thursday (Jan 26) by the Singapore Economic Development Board (EDB). 

On a month-on-month seasonally-adjusted basis, industrial production rose 6.4 per cent in December 2016 compared to the previous month.

Overall, manufacturing output rose 3.6 per cent in 2016 over 2015.

STRONG ELECTRONICS, BIOMEDICAL PHARMACEUTICALS OUTPUT

Output from the key electronics cluster increased 49.4 per cent in December from a year ago. This was largely supported by the semiconductors segment, which saw output rise by 94 per cent. For the whole of 2016, output of the electronics cluster expanded 15.9 per cent compared to 2015. 

The biomedical manufacturing cluster, meanwhile, expanded 44.9 per cent year-on-year in December, said EDB. The growth was mainly due to the pharmaceuticals and medical technology segments, which expanded 53.8 per cent and 19 per cent respectively. The whole cluster grew 13.6 per cent in 2016 compared to the year before.

The precision engineering cluster saw an increase of 6.1 per cent in December compared to the same month last year. The machinery and systems segment grew 8.5 per cent with higher export demand for semiconductor related equipment, while the precision modules and components segment recorded higher output of industrial rubber, dies, moulds, tools, jigs and fixtures and metal precision components, added EDB.

In the chemicals cluster, output rose 4.1 per cent on a year-on-year basis in December 2016. This was supported by higher output in the petrochemicals (18.4 per cent), petroleum (16.7 per cent) and specialties (4.1 per cent) segments. For the whole of 2016, output in the cluster fell 0.9 per cent compared to 2015.

In 2016, the general manufacturing industries’ output declined 2.5 per cent from a year ago, although it grew 2 per cent year-on-year in December 2016. EDB said this was mainly attributed to the 22.8 per cent growth in the food, beverages & tobacco segment. However, growth in the cluster was moderated by declines in the miscellaneous industries (-10.6 per cent) and printing (-14.6 per cent) segments. 

Data showed that transport engineering remained a drag. Production in the marine and offshore engineering segment declined 26.1 per cent year-on-year in December, with lower output in oilfield and gasfield equipment as well as ship building and repair jobs. However, the aerospace and land transport segments grew 15 per cent and 11.5 per cent respectively.

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Singapore's manufacturing economy expands for fourth straight month

SINGAPORE: Singapore’s factory activity expanded for a fourth straight month in December, with the Purchasing Managers’ Index (PMI) coming in at 50.6 last month, an increase of 0.4 point from November.

According to data from the Singapore Institute of Purchasing and Materials Management (SIPMM) released on Tuesday (Jan 3), the expansion was attributed to a faster rate of expansion in factory output, inventory holding, as well as new orders and new exports.

The readings also indicate that “the overall manufacturing sector has moderated”, said SIPMM, adding that the latest data shows “resilience of the manufacturing sector in spite of the uncertainties in the global economy”.

A reading above 50 means the manufacturing economy is expanding, while a reading below that indicates a contraction.

A corresponding index for the electronics sector also posted an expansion, with the PMI for December standing at 51.2, an increase of 0.7 point from the previous month.

For the growth in Singapore’s manufacturing to be sustained, there must be stronger demand from global economies, said Mr Vishnu Varathan, senior economist at Mizuho Bank. “Manufacturing is about breaking even, picking up slightly, but the bottomline is it remains very tentative and how global relations play out with the feedback into global demand. We remember that overall exports demand has remained suppressed,” he explained.

China’s manufacturing sector, for example, expanded for a fifth straight month in December, but growth slowed a touch more than expected due to persistent weakness in exports.

Until there is a noticeable improvement in demand, “it will be difficult to suggest that the manufacturing sector globally is set for an imminent rebound”, said Mr Varathan.

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Singapore's manufacturing output up 11.9% in November

SINGAPORE: Industrial production in Singapore in November expanded at its fastest annual pace since March 2014, buoyed by strong electronics and pharmaceuticals output, data showed on Friday (Dec 23).

Manufacturing output in November jumped 11.9 per cent from a year earlier, data from the Singapore Economic Development Board (EDB) showed. The median forecast in a Reuters survey predicted a 1.6 per cent expansion.

Excluding biomedical manufacturing, output grew 6.4 per cent. 

On a month-on-month and seasonally-adjusted basis, industrial production rose 6.1 per cent in November, its strongest since January this year. The median forecast was for a contraction of 2.0 per cent. Excluding biomedical manufacturing, output grew 5.1 per cent month-on-month.

STRONG ELECTRONICS AND PHARMACEUTICALS OUTPUT

Output of the biomedical manufacturing cluster grew 34.8 per cent in November, compared to the same month last year, while the pharmaceuticals segment expanded 36.1 per cent. The growth was mainly due to a different mix of active pharmaceutical ingredients and biological products produced, said EDB. The medical technology segment also posted a growth of 30.8 per cent, with high export demand for medical instruments, it added. 

Meanwhile, the electronics cluster’s output increased 24.2 per cent in November on a year-on-year basis. According to EDB, growth in the cluster was largely attributed to the semiconductors segment, which grew 49.6 per cent.

Output of the precision engineering cluster grew 7.6 per cent, compared to a year ago. The machinery and systems segment grew 10 per cent as export demand for semiconductor-related equipment increased, while the precision modules and components segment recorded higher output of industrial rubber and dies, moulds, tools, jigs and fixtures. 

The chemicals cluster’s output rose 3.5 per cent, led by the petroleum segment which grew 22 per cent due to the low base effect last year as some plants shut down for maintenance, EDB said.

General manufacturing industries’ output declined 0.9 per cent year-on-year, mainly attributed to the miscellaneous industries and printing segments which contracted 4.5 per cent and 16.2 per cent respectively.  

The transport engineer cluster’s output shrank the most, contracting 14.8 per cent compared to the same month last year. The land transport segment grew 12.2 per cent, but this was offset by declines in the aerospace and marine and offshore engineering segments. Meanwhile, the marine and offshore engineering segment remained weak as the low oil price environment continued to affect rig building activities and demand for oilfield and gasfield equipment. 

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Singapore's maritime sector given boost with new lab aiming to cut fuel costs

SINGAPORE: A new research laboratory developing clean energy solutions promises to be a boost for Singapore’s maritime sector. 

The facility, which was launched on Wednesday (Dec 7), is located at Nanyang Technological University (NTU), with offshore engineering firm Sembcorp Marine investing S$ 10 million in the laboratory. It aims to develop novel solutions in fuel emission management, energy efficiency and green shipping.

Such innovation takes on an additional importance as by 2020, new emission regulations will require shipping firms to be greener in their operations. The cost of meeting the regulations is expected to be high for companies as they need to overhaul existing engine systems of ships to satisfy emission rules.

NTU Professor Freddy Boey said: “The International Maritime Organisation has set stringent guidelines that will come into effect in 2020. They regulate the amount of pollution ships emit, and especially the type of fuel they use. 

“But at current fuel prices, eco-friendly fuel alternatives cost about 40 per cent more than regular fuels.”

With the new laboratory, these costs are expected to be pared down through innovations like a dual-fuel engine capable of burning traditional and clean fuel.

“As coal and other fossil fuels become depleted at an alarming rate, we see a rising interest in gas as a viable and also cleaner energy alternative. In the longer term, the focus will no doubt be on overcoming the cost and efficiency constraints of harnessing renewable energy,” said Sembcorp Marine’s chief executive, Wong Weng Sun. 

Researchers will study ways to retrofit ships to operate using two fuel types simultaneously so as to reduce harmful emissions while keeping costs low, NTU said.  

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