Singapore Industrial Market Q1 2020

Singapore industrial under pressure  as  manufacturers face potential spuuly-chain disruption.

Despite some signs of recovery towards then end of 2019, manufacturing firms’ sentiments have been clouded by the COVID-19 pandemic. The number of orders is expected to decline as economic activity slows and supply chains get disrupted with social distancing measures and travel bans in place, affecting manpower and work productivity.

The Singapore economy shrunk by 2.2% year-on-year (y-o-y) in Q1 2020, reversing the 1.0% y-o-y growth in Q4 2019, based on the Ministry of Trade and Industry (MTI) advance estimates. Following the 2.3% contraction in Q4 2019, the manufacturing sector narrowed by 0.5% y-o-y in Q1. This was largely driven by output declines in the electronics and chemicals clusters despite expansions in the biomedical manufacturing and precision engineering clusters, heavily attributed to the COVID-19 outbreak that is projected to beset the manufacturing sector in 2020.

Likewise, the Singapore’s Purchasing Managers’ Index (PMI) fell in February 2020 to 48.7 after witnessing expansions of 50.3 in January 2020 and 50.1 in December 2019. The contraction was largely led by the pandemic that has resulted in travel restrictions and national lockdowns, disrupting supply chains and productivity of manufacturing workers.