Some industries may grow even as Singapore heads for recession

The biomedical sector kept industrial production in positive territory in the first quarter by surging 68 per cent. ST PHOTO: KUA CHEE SIONG

Some businesses may continue to grow despite the country sliding into its worst-ever recession, the Monetary Authority of Singapore (MAS) said.

It noted that the pandemic has in fact boosted demand for medical products, making it Singapore's only trade-related industry to register growth amid the collapse in global demand for other exports.

Pharmaceutical shipments rose 48.6 per cent in March over the same month last year, helping to lift overall non-oil domestic exports for the month.

The biomedical sector, which includes the drug industry, also kept industrial production in positive territory in the first quarter by surging 68 per cent.

Demand is on the rise for products needed to fight the outbreak, such as ventilators, masks and test kits, which are produced by several Singapore-based companies, MAS said.

It added that when a vaccine for the coronavirus is eventually developed, Singapore could play a role in its mass production due to the presence of major global pharmaceutical firms.

Modern services such as those in the information and communications technology sector may also benefit from circuit breaker restrictions amid the sudden surge in the number of people working from home.

Firms involved in online consumer-facing business should continue to gain from increased online transactions, MAS said.

Many companies have had to activate work-from-home arrangements by changing their back-end processes.

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The extended circuit breaker is also causing a shift in retail spending habits, with consumers having an increased demand for daily necessities while eschewing luxury and durable goods spending.

F&B outlets near residential areas, which remain open for takeaway or delivery, could outperform restaurants that tend to be concentrated in business districts.

Construction has virtually stalled and may remain on hold through this quarter due to work stoppages during the circuit breaker period and a spike in infections in dormitories.

Still, the sector should see some recovery in the second half of the year, underpinned by infrastructure projects such as the Deep Tunnel Sewerage System Phase 2, Thomson-East Coast MRT Line and Runway 3 for Changi Airport Terminal 5, MAS said.

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A version of this article appeared in the print edition of The Straits Times on April 29, 2020, with the headline Some industries may grow even as Singapore heads for recession. Subscribe