SINGAPORE – Singapore’s economy managed to add 4,400 new manufacturing jobs in the first six months of 2023, Deputy Prime Minister Heng Swee Keat said on Wednesday.

This was despite the ongoing malaise hampering factory activity, even as economies emerge from the Covid-19 pandemic.

Speaking at the opening ceremony of the Industrial Transformation Asia-Pacific (Itap) 2023 event held at the Singapore Expo, DPM Heng said that these additional jobs were the result of the “good progress” made since the previous edition of Itap in 2022.

Back then, he had launched refreshed industry transformation maps for five sectors – electronics, precision engineering, energy and chemicals, aerospace, and logistics – to boost resilience and seize new market opportunities.

Mr Heng also said that in the hyperconnected world of Industry 4.0, “no single manufacturing base is an island”.

“Rather, each country is a node whose connection and connectivity with other nodes will shape the pace of progress and prosperity, globally.”

He added: “The ability to develop smart and connected value chains, therefore, becomes a significant competitive advantage.”

To this end, he said that a platform is being developed for manufacturers along a value chain to share data so that they can respond more quickly and collectively to demand and supply fluctuations.

In addition to the new jobs created, the number of workers retrenched from the manufacturing sector had also declined over the same six-month period.

This was revealed by Minister for Trade and Industry Gan Kim Yong in a written reply to a parliamentary question from Mr Desmond Choo (Tampines GRC) in September about the state of the manufacturing sector.

Mr Gan had said then that the number of retrenchments had tapered, from 1,400 in the first quarter of 2023, to 500 in the subsequent three months.

Economists The Straits Times contacted were mostly upbeat about the outlook for local manufacturers.

DBS Group Research economist Chua Han Teng said that the continued increase in manufacturing employment in the first half is a positive development.

“It reflects manufacturers’ confidence in long-term growth, notwithstanding the current soft patch, during which factory output had contracted for 11 consecutive months in August,” he added.

Maybank Research senior economist Chua Hak Bin went further, saying that the manufacturing downturn “appears to have bottomed out in the first half of the year”.

“We expect manufacturing and exports to pick up in the fourth quarter, which should create even more manufacturing jobs,” he added.

In contrast, UOB associate economist Jester Koh was more circumspect.

He said that between 2007 and 2022, there had been an annual loss of nearly 6,000 jobs on average as manufacturers become increasingly capital- and technology-intensive.

Notably, there was a sharp drop in manufacturing jobs at the start of the pandemic but they have since bounced back to near pre-pandemic levels.

Mr Koh said that in this context the first-half 2023 number appears “a tad stronger than expected”, but he cautioned that the pace could moderate in the latter half, given the weak external demand amid an elevated interest rate environment.

During his address, Mr Heng also highlighted the need for the manufacturing sector to innovate not only for performance, but also for the planet as well as for people.

On the sustainability front, he cited the initiative by the Agency for Science, Technology and Research (A*Star) to give used electric-vehicle (EV) batteries a second life as such cars become more ubiquitous.

The agency is working with partners, including a tie-up with McKinsey & Company, to set up an EV battery testing and disassembly line.

Still in its first phase, the collaboration is focused on demonstrating the possibility of disassembling large volumes of EV battery packs safely and efficiently.

The agency’s Advanced Remanufacturing and Technology Centre, which is spearheading these efforts, is engaging with both local and global industry partners to try to commercialise the process.

Meanwhile, other A*Star research institutes are working with their peers to build a circular economy, where old EV batteries are broken down into component parts to be reused in the manufacture of new ones through the development of key remanufacturing processes and systems solutions.

Another topic Mr Heng touched on was the talent pipeline. He said that Singapore is working with partners from the region and beyond to build capabilities and a development pipeline for young talent for the manufacturing sector.

To this end, the Singapore Polytechnic (SP) signed an agreement with the Malaysian Research Accelerator for Technology and Innovation to drive innovation, exchange knowledge and catalyse technological progress.

Both SP students and their Malaysian counterparts will get to work on multi-disciplinary sustainability projects while leveraging design-thinking methodology to address industry challenges.

They can also take part in activities such as hackathons, ideathons, boot camps and facility visits to nurture entrepreneurship and promote cross-cultural collaboration.