Higher costs, dismal external demand fuel manufacturing dive

Singapore

THE manufacturing sector has turned out to be the weakest link in the first half of this year after posting a second straight quarter of contraction on Tuesday that came in even worse than initially feared. Growth in services and construction, however, managed to offset the manufacturing softness.

Manufacturers are likely to continue to face cost pressures and tepid demand, economists said, noting that the industry's unit business costs have been climbing increasingly quickly amid a manpower crunch.