Plunging manufacturing sector drags down GDP

Singapore’s GDP contraction of 6.8 per cent in Q4 of 2009 is largely due to a 38.4% plunge in the manufacturing sector.

This decline was mainly due to a contraction in the output of the biomedical manufacturing and transport engineering clusters.

These figures were released in a report by the Ministry of Trade yesterday.

This was attributed to a stark drop in the pharmaceuticals segment of 52.5%. A note by the Economic Development Board said that the decline in production was due to “a different product-mix and some maintenance shutdowns.”

Other industries such as the electronics, chemicals and precision engineering clusters posted positive growth.

Construction also picked up by 4.3 per cent on a seasonally-adjusted quarter-on-quarter annualised basis in the fourth quarter compared to 0.9 per cent in the third quarter.

Another poor performer was the Services Producing Industries sector, which fell by 10.9 per cent. According to a note by MTI, this is mainly due to a slowdown in wholesale & retail trade from its strong growth in the third quarter. Other areas of Services Producing Industries did experience growth, however, such commercial bank, foreign exchange trading and Asian Currency Unit (ACU) business in financial services.

However, the slowdown is within the government’s forecast of 2.0 to 2.5 per cent, being at 2.1 per cent.

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