Reply to article by Asia Sentinel ("Numbers Oddity in Singapore")
1.We refer to your article “Numbers Oddity in Singapore” dated 18 April 2011. The article contains several inaccuracies and erroneous views of the Singapore economy
2.First, the article states that the manufacturing sector’s contribution to Singapore’s GDP was 29 per cent in 2008 and 31 per cent in 2010. These figures are wrong: the actual contributions were 21 and 22 per cent respectively for the two years.
3.Second, the article makes references to the swings observed in the quarterly manufacturing estimates since 2008, and insinuates that they do not represent reality. In doing so, it casts doubt on the accuracy and reliability of Singapore’s manufacturing and overall GDP statistics. This assertion shows a lack of understanding of the structure of Singapore’s manufacturing sector.
4.The observed swings in the quarter-on-quarter growth rates of Singapore’s manufacturing value-added in the past year largely reflect the nature of production in the biomedical manufacturing (BMS) cluster, which accounts for a fifth of overall manufacturing value-added. Output in the BMS cluster can expand or contract sharply in any one quarter, due to the effects of batch processing, scheduled plant maintenance shutdowns and switches in the value-mix of products. Such production practices are not peculiar to Singapore, but can also be observed in pharmaceutical plants in other countries.
5.Global events can also result in large swings in industrial production. The global financial crisis led to sharp sequential declines in manufacturing output in Singapore in late 2008 and early 2009, while the subsequent recovery in demand led to a strong rebound in output. Such sharp fluctuations were also seen in economies without large BMS industries like South Korea and Taiwan.
6.Finally, the article suggests that consumption in Singapore has been “suppressed”. This is not true. Singapore’s success in anchoring foreign and domestic investments in the economy has contributed to job creation and sustained wage growth over the past decade. This has in turn supported private consumption. On a per capita basis, private consumption expenditure grew by an average of 1.6% per annum in the past decade, faster than the pace of increase seen in other developed economies
Mrs. Cindy Keng
Director (Corporate Communications)
Ministry of Trade and Industry
27 April 2011
Asia Sentinel’s article can be found at : http://www.asiasentinel.com