Since the end of 2017 and introduction into 2018, economists are constantly trying to predict what the economy will bring to Singapore. 2017 saw the best growth in 7 years but not everyone believes this pattern will continue this year. 2017 was a mix of incredible highs and incredible lows, predictions, in general, were not up to par.
In 2017 Singapore, manufacturers hit an incredible high in performance with a production growth of 10.1% which is the highest since 2010. However, factories saw a decrease in production of 3.9% last month. Unfortunately, December’s lack of growth was lower than expected due to the slow moving biomedical sector.
According to a Bloomberg poll, growth fell short of economists’ expectations of a 0.8% which included the biomedical sector. Overall, growth should have reached 4.5% according to the latest statistics from the Economic Development Board.
In 2010, Singapore’s industrial growth shot up to 29.7% before the recession and 2017’s growth of 10.1% was the best since that time. Analysts believe that 2017 was a very good year for manufacturers due to an economy that was performing better than was expected.
Base effects can be difficult to forecast inflation levels but the high base effects were not a surprise and the fall in the biomedical sector was not particularly surprising either, due to its volatility. According to the Economic Development Board, while the failure of the biomedical field was not a surprise, they stated that pharmaceuticals have never followed a set pattern and can be difficult to predict. The biomedical manufacturing was the worst last month, declining 34.7% compared to the year before. Compared to 2016, it fell 9.3% over the entire year.
Economists predicted growth in manufacturing would be moderate, they had seen warning signs and strongly believe the kind of growth in 2017 will probably not repeat itself in 2018. Electronics, supported by semiconductors and computer peripherals, saw a growth of 4.2% in December but that was a severe decline from November’s year-on-year growth of 28.2% and October’s 45.4%.
Overall, electronics grew 33.5% and semiconductors grew to an enormous 48.3% in 2017 in comparison to the year before. Manufacturing is expected to have a slow growth this year. Economists believe December’s industrial production stats are signs that the services sector will take over the lead in economic growth.
Further signs have recently been released that are showing positive signs from the labor market which, in turn, could give an added push for domestic consumption. It’s believed that services will contribute to a larger growth as recovery spreads to the domestically oriented service sectors.
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