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Mr Lim Hng Kiang said that job creation will slow down and some retrenchments may be inevitable in the manufacturing and export-oriented sectors as they adjust their employment with the falling global demand. -- ST PHOTO: TERENCE TAN
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SINGAPORE expects its manufacturing industry to remain weak amid easing demand from its biggest markets, Trade and Industry Minister Lim Hng Kiang told Parliament on Monday.
Output from the island's pharmaceuticals industry is faltering because of competition from generic drugs and delays in government approvals for new products, said Mr Lim, according to a Bloomberg reort.
Electronics and chemical industries are also facing a 'slowdown', he said.
'All these sectors depend crucially on external demand, especially from developed countries like the US, Japan and Europe,' Mr Lim said. 'Demand from these countries has come down considerably and is expected to remain weak for some time to come.'
The US housing recession that has roiled financial markets is hurting exports and threatening expansion in a region the Asian Development Bank says will account for more than a fifth of global growth this year.
Singapore earlier this month cut its forecasts for 2008 economic growth and exports as demand for goods and services declined.
Singapore's drug exports tend to fluctuate from month to month because of swings in production as companies shut plants for cleaning before making different chemicals.
Some pharmaceuticals require several ingredients to be made and mixed before they are ready for export, said the Bloomberg report.
'Significant swings in pharmaceutical output occur quite regularly due to changes in product mix but these do not reflect fundamental weaknesses in the industry,' said Mr Lim.
Jobs losses may occur as a result of a decline in demand for goods from overseas markets, he warned.
Manufacturers in the city-state added 22,000 jobs in the first half of 2008.
'We should expect that job creation will slow down and some retrenchments may be inevitable in the manufacturing and export-oriented sectors as they adjust their employment with the falling global demand,' he added.
Companies are adding investments and expanding their businesses, the minister said. The island attracted S$12.9 billion ($9.1 billion) of fixed-asset investments in the first half and S$4.8 billion in business spending in the same period, said Mr Lim.
'We remain confident that manufacturing as a whole will still generate good employment for Singapore,' he said. The investments this year may create more than 10,000 skilled jobs. Companies such as Exxon Mobil Corp. and Neste Oil Oyj pushed investment in 2007 to a record S$17.2 billion, the Economic Development Board said in January.
