in Restructuring :-
the past five years, our economic restructuring journey has focused on raising
productivity to achieve quality growth. a)We tightened the inflow of foreign workers; b) We
invested significantly in broad-based measures such as the Productivity and
Innovation Credit(orPIC); and, c) We
introduced the Transition Support Package to help firms adjust to economic
restructuring and rising business costs.
has been promising. a)
More firms are engaging in productivity efforts. For instance, a survey has
shown that around 9 in 10 of our SMEs embarked on productivity initiatives in
2015. b) The net inflow of
foreign workers has slowed significantly from nearly 80,000 in 2011 to less
than 23,000 in 2015 .
a tighter labour market, we managed to sustain real median income growth for
Singaporeans at an average of 2.9% per year over 2009 to 2015.
growth has not been as strong as we would like. While productivity has grown by
an average of 2.7% per year over 2009 to 2015 , most of this increase was due
to the cyclical rebound in 2010 and 2011. Productivity growth has remained
relatively flat over the past three years . We must keep working on this.
2015, the economy grew by 2%. The performance across sectors was varied:
wholesale and retail trade, and finance and insurance did well, while
manufacturing, in particular the marine and offshore segment, declined.
business conditions are difficult and uncertain. Many of our firms are facing
weaker top-line growth, rising manpower costs and tighter financing. Workers
are anxious as retrenchment has increased, including among professionals.
the coming year, economy’s heavy
dependence on external demand, the weaknesses in the global economy will pose
pace of global economic recovery is uneven, with the US being the most
advanced, while Europe and Japan will only see modest growth aided by monetary
stimulus. Closer to home, China is going through a transition towards a more
sustainable growth path. It is a complex transition and any short-term setbacks
may create volatility in the financial markets.
therefore expect externally-oriented sectors such as manufacturing to continue
to face subdued demand. The extended downturn in oil and other commodity prices
is affecting commodity-related activities, particularly the marine and offshore
sector. Weak global demand in electronics will spill over to related sectors
such as precision engineering.
while overall growth is subdued, our business landscape is varied. There are
pockets of growth and resilience. Even within manufacturing, the medtech and
chemicals sectors are growing. Exports of services, including tourism,
financial services, Information and Communications Technology (or ICT) and
consultancy are benefiting from regional demand. Domestic oriented sectors such
as retail, healthcare and education have been, and should remain, stable.
Construction, too, will be supported by a large expansion in public
infrastructure and housing projects, even as private residential demand has
sectors, prospects vary across firms. Some are becoming more competitive and
gaining market share, while others are seeking to relocate to cheaper
prospects in the labour market are mixed. Overall, redundancies increased in 2015
as global demand slowed and restructuring continued. Some of those made
redundant took longer to find jobs. At the same time, however, unemployment
remained low at 1.9%. While some sectors such as the offshore and marine and
manufacturing are retrenching staff, others such as healthcare, education, and
ICT are hiring.
summary, while we face weaker prospects overall, MTI expects GDP to grow at 1%
to 3% for the year, not very different from the 2.0% in 2015. So while
conditions are difficult, we should not be overly pessimistic.
as we tackle immediate cyclical weaknesses, we must be alert to major
structural changes abroad and at home.
economies are continuing to restructure, and will alter the global competitive
landscape in the process. China is rebalancing towards consumption and services
led growth, and developing innovation-intensive industries. India is building
on its strengths in ICT, and seeking to attract manufacturing investments.
These ongoing changes are rapidly changing the patterns of trade and
specialisation in Asia.
changes, especially in robotics, automation, artificial intelligence and ICT,
are disrupting business models across all sectors. Some call the coming changes
“Industrial Revolution 4.0.”
home, manpower growth is slowing, and our population is ageing. Real wage
increases over the past few years have benefited workers and households. But
unless productivity improves in tandem, we will be less competitive, and both
businesses and workers will be worse off.
these changes pose intense challenges for our businesses, which will have to
succeed in a more competitive environment while contending with tighter labour
constraints. The need to restructure is both urgent and critical.
there are challenges, there are also growing opportunities. We are in the
centre of the Asian growth story: China, India and ASEAN are expected to grow
at 6.3%11 per year over the next five years, accounting for about one-third of
global growth. The ASEAN Economic Community, the Trans-Pacific Partnership, and
China’s One Belt One Road initiative will open up new opportunities.
are well placed to benefit from technological changes – our investments in
education, R&D and digital infrastructure will enable us to seize new
We also started restructuring early and our
firms, including SMEs, are embarking on change. Our people are valued for their
integrity, adaptability, and multi-cultural sensitivity. Singapore is a
highly-connected, trusted node.