Singapore’s manufacturing outlook ‘slightly better’ in 2025, but mostly for tech-related production: SMF
Association hopes to help companies navigate challenges through a new agreement to boost collaborations between MNCs and SMEs
SINGAPORE’S manufacturing outlook for 2025 is “slightly better” than last year, but growth is likely to be uneven, with advanced manufacturing industries gaining the most, said Singapore Manufacturing Federation’s (SMF) president Lennon Tan.
This is based on surveys with the federation’s members, he added, at a media briefing during SMF’s Manufacturing Day Summit on Friday (Jan 17).
The advanced manufacturing cluster – including semiconductor and electronics producers – is likely to see “fairly full” order books, boosted by the adoption of artificial intelligence (AI) as well as demand for personal computers.
But manufacturers outside this cluster will “continue to feel cost pressures” as well as uncertainty, and are hence unlikely to invest as much, said Tan. “Therefore, this growth that we talk about may not be felt in all sectors.”
However, SMF is committed to helping such companies navigate these challenges and “upgrade to a higher value chain”.
One such effort is a memorandum of understanding (MOU) led by SMF and inked on Friday, which aims to foster greater collaboration between multinational companies (MNCs) and small and medium-sized enterprises (SMEs).
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About half of the nine signatories are MNCs: IBM, Continental, Zebra Technologies and Lenovo.
The rest comprise SMF; UOB; the Singapore Institute of Technology’s Innovation Leadership Programme; surface finish specialist Applied Total Control Treatment; and the Singapore Institute of Manufacturing Technology, a research institute of the Agency for Science, Technology and Research.
This “early group” of partners has agreed to develop an ecosystem to encourage MNC-SME partnerships, while driving innovation and digital transformation, said SMF chief executive Dennis Mark.
Such an ecosystem will offer both downstream and upstream benefits to MNCs: they can tap on local resources and supply chains, while the local market also provides customers for their products and solutions.
At the same time, such collaborations give SMEs access to technology used by MNCs.
SMF believes that the initiative will enhance the capability and capacity of Singapore companies, thus attracting more MNC investment, said Mark, noting that the presence of MNCs has been a “success factor” for the Republic over the past decades.
Bracing for uncertainty
Asked about potential tariffs and export controls that US president-elect Donald Trump may impose upon returning to the White House, Tan said: “Most of the companies here are bracing for what is to come.”
But Singapore often “thrives” under uncertainty and crisis, he added, thanks to its adaptability, trustworthiness and the fact it has many “more friends than enemies”.
The Republic’s strength is its consistency, and that predictability is valued by businesses amid an uncertain world, he noted.
“The only thing” that companies can do is to not rely on a single source, he said. SMF is helping its member companies to diversify and seek business opportunities elsewhere, as a way to make their supply chains more robust and resilient.
SMF’s internationalisation programme involves taking members to “non-traditional” markets such as central Europe, where workers are highly skilled yet costs can be 30 to 40 per cent lower than in Singapore.
Smarter manufacturing
At the summit at Sands Expo and Convention Centre, which attracted about 1,500 attendees, there was much buzz over AI and Industry 5.0, which uses smart technologies that are human-centric and sustainable.
In preparation for Industry 5.0, Singapore must strengthen its manufacturing ecosystem, focus on innovation and develop a skilled workforce, said Minister of State for Trade and Industry Alvin Tan in the summit’s opening address.
“Our strength lies in (our) ecosystem, of which manufacturing is a key part, but finance, professional services... startups, fintech and the like (also) come together,” he added.
The notion that manufacturing can offer only a “blue-collared job” must also be challenged, he noted.
“There are many, many different industries such as tech and finance that are infused in the manufacturing sector,” he said. “The increasing use of tech and generation of higher-value jobs will make manufacturing, hopefully, even more exciting and attractive.”
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