Singapore’s markets and exchange traded fund [ETF] are closely tied to the recovery of the U.S. markets, but Singapore is stepping up its manufacturing industry to hasten growth.
The Singapore ambassador to the U.S. claims that the recovery from the economic slump will occur in east Asia when the U.S. rebounds, reports Tom Parsons for Forbes. The East Asian region still relies heavily on exports, and the United States is a voracious importer. The IMF estimates that Singapore’s economy could contract up to 10% this year.
The Purchasing Manager Index showed a 51.1 in June for Singapore’s manufacturing industry, readings above 50 indicate the manufacturing economy is expanding, as stated in PRWeb. Trade and Industry Minister Lim Hng Kiang stated that the country is committed to growing its manufacturing industry, a key contributor to the country’s economic performance.
Growth in key pillars of the manufacturing industry include:
- Electronic sector. The electronic index increased 2.1 points over the previous month to expand to 55. It indicated higher levels of new orders from both domestic and foreign markets.
- Aerospace sector. Aerospace engine manufacturer Rolls Royce RYCEY.PK) showed its confidence in Singapore’s aerospace sector by relocating its supply chain to the country. Singapore is Asia’s major aerospace maintenance, repair and overhaul provider.
- Clean energy sector. The government has identified this as a key growth area, especially in solar energy. It has been announced that a $350 million investment will be made into the sector to increase research and development and capability development.
- Biomedical sector. The biomedical manufacturing sector increased 120.4% year-over-year in May, mostly because of a 138.6% jump in pharmaceutical output.
- Oil sector. Shell invested in a new $3 billion petrochemical cracker complex that is slated to start up in Singapore at the end of 2009. It will be Shell’s (NYSE:RDS.A) largest refinery worldwide with production capabilities of 500,000 barrels a day.
- Water sector. During the Singapore International Water Week, local firms won some billion-dollar contracts, ranging from building desalination plants, or equipment such as pumping systems and pipe networks, to exchanging expertise in membrane-based water treatment technologies.
- iShares MSCI Singapore Index (NYSEARCA:EWS): up 27.2% year-to-date
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Max Chen contributed to this article.