Here’s definitive proof that manufacturing is Singapore’s Achilles' heel

Will its six-quarter struggle finally end?

All available metrics point to the bleak situation of the city-state’s manufacturing sector, owing to a slowing China and soft developed country demand.

According to analysts from Deutsche Bank, authorities are also running out of options in boosting productivity, as enhancement initiatives have been fruitless.

“Manufacturing has been contributing poorly to GDP for six quarters, while construction has also been lackluster. The future performance of manufacturing and construction would continue to be weak, in our view, dragging down overall growth,” Deutsche Bank said.

“There is a limit of how long manufacturing can remain in Singapore when substantially cheaper production bases are situated right across the border,” they added.

Meanwhile, Singapore is banking on its budding services sector to be its safety net.

“We think that Singapore is on course to join its industrial economy counterparts where services do indeed become an increasingly larger share of GDP. Given that it is a wealthy yet aging society, and the government is on track to expand the social safety net, Singaporeans’ need and ability to consume more services will continue to rise,” Deutsche Bank said.