More headwinds ahead for manufacturing sector after weak January print

Singapore’s export competitiveness is eroding.

The manufacturing sector is in for more headwinds in the coming months after starting off on a weaker-than-expected footing in January.

Singapore’s Industrial Production (IP) grew 0.9% year-on-year in January, less than consensus expectations of 3.3% year-on-year growth.
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According to UOB, the weak print had added on to concerns on several headwinds facing the manufacturing sector in the coming months.

“First, the weak economic conditions in both the Eurozone and Japan will weigh on manufacturing exports to these countries. Currency weakness in these two regions will reduce Singapore’s export competitiveness in the global market. Second, the still-low global oil prices could continue to impact the marine & offshore engineering and petrochemicals segments. Third, the tight labour market continues to plague manufacturers as they work around this issue while trying to improve labour productivity so as to reduce labour-intensity,” stated UOB.