Manufacturing and trade sectors set to drive economic growth in 2H24

Experts predict a boost for manufacturing from global tech recovery.

Singapore's manufacturing and trade-related sectors will propel its economy to growth in the second half of 2024.

Within the manufacturing sector, RHB said electronics, precision engineering, and transport engineering will be bright spots.

“Empirically, these industries are plugged into the global trade landscape and will continue to benefit from the uptick in global Electrical and electronics (E&E) demand and trade activities,” RHB said.

RHB expects a recovering global backdrop to boost Singapore's industrial production growth in 2H24. 

Similarly, Nomura forecasts a significant boost in manufacturing output from a global tech turnaround and new pharmaceutical capacity. 

"Services will likely also hold up as industrial output improves, making GDP growth more broad-based," Nomura added.

Meanwhile, UOB cautioned that tight financial conditions from elevated interest rates in the US and EU may temper the extent of improvement in externally-oriented sectors like manufacturing.

UOb, however, clarified that these sectors could stage a more meaningful recovery in 4Q24, “should major central banks in advanced economies begin or continue to lower policy rates, which may stimulate investment and consumption activity abroad.”