Trends in Manufacturing and Manufacturing-Related Services
In 2015, the manufacturing sector shrank by 5.2%, due to external headwinds facing several clusters. Nonetheless, the sector continues to be an important pillar of the Singapore economy, with its share of nominal GDP increasing over the past two years, from 18.5% in 2013 to 19.8% in 2015 (Exhibit 1). Singapore’s manufacturing sector also remains attractive to investors. Despite the challenging external environment, total manufacturing fixed asset investment commitments secured by EDB in 2015 was S$8.3 billion, higher than the S$6.8 billion recorded in 2014.
The manufacturing sector employed around 510,000 workers as of December 2015. While employment in the sector saw a decline in recent quarters due to sluggish global economic conditions and the tighter supply of foreign manpower, the median income for locals in the sector has continued to grow. In 2015, the nominal median monthly income of full-time employed residents in the sector rose by 5.4%, from S$4,210 in 2014 to S$4,437. Over a longer 5-year period from 2009 to 2015, the nominal median monthly income of full-time employed residents in the sector increased by 5.5% on a CAGR basis, higher than the 5.1% growth per annum for full-time employed residents in the overall economy (Exhibit 2).
Given the need to be competitive in global markets, manufacturing firms have also seen relatively strong productivity growth in recent years despite the sluggish external environment. In particular, over the period of 2009 to 2015, real value-added (VA) per worker in the manufacturing sector grew by 5.9% CAGR, higher than the 2.2% for the overall economy.