Singapore’s manufacturing sector experienced a slowdown in growth during the first quarter of 2025, according to recent data from JTC Corporation.
This decline was observed both year-on-year and sequentially, suggesting underlying weaknesses in external demand for Singapore’s manufactured goods.
Despite this, demand for industrial space in the same period showed an increase compared to the fourth quarter of 2024, driven by industrialists’ optimism about regional growth and the absence of tariffs on Singapore.
Prices and rents for industrial spaces continued to grow, albeit at a more stable rate, with a 1.5% increase in prices and a 0.5% rise in rents during Q1 2025.
However, the occupancy rate for industrial spaces has remained stagnant at 89% since Q2 2024, indicating a potential inflection point in the market.
The sales of industrial spaces saw a decline, with multiple-user factories, single-user factories, and warehouses all experiencing reduced transactions compared to previous quarters. The median price for multiple-user factories slightly decreased to $494 per square foot, whilst single-user factories and warehouses saw varied price changes.
Looking ahead, the manufacturing sector may face further challenges if global trade continues to slow, according to Huttons.
The imposition of tariffs could increase the cost of finished goods, potentially reducing consumer demand and impacting the entire supply chain.
However, there is a possibility for Singapore to produce higher value-added goods for export to the US, given its lower baseline tariffs compared to other ASEAN countries.
The outlook for the industrial market remains cautious, with prices and rents expected to remain flat throughout 2025.
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