28 February 2025

Singapore's Manufacturing Sector in 2025: Trends & Opportunities

Manufacturing is a cornerstone of Singapore's economy, having evolved significantly over the years. The sector has shifted from low-cost, labour-intensive production to sophisticated, high-value manufacturing. Last year in 2024, Singapore saw a 4% economic growth rate, with an uptick in electronics manufacturing in particular. 2025 is expected to see a continuous increase as well, as the sector continues its recovery.

Notably, high-tech industries such as semiconductors and 3D printing are driving this upward trend. The government’s proactive measures, including a 10-year plan to boost competitiveness and innovation in the manufacturing sector, aim to grow the industry significantly by 2030.

With multinational industry giants constantly growing larger, Singaporean businesses need to stand at the forefront of Industry 4.0 in order to compete with them, and must capitalise on key trends to seize the opportunities that are arising within the evolving industrial landscape.

4 Trends in Singapore's Manufacturing Sector

1. Industry 4.0 and 5.0

Industry 4.0

Industry 4.0, also known as the fourth industrial revolution, integrates automation and data exchange in manufacturing establishments. This change involves concepts such as the Internet of Things (IoT), Big Data, and Artificial Intelligence (AI). The shift towards smart factories and remote engineering is affecting how the global supply chain views manufacturing.

To stay competitive and relevant to clients and investors, the world’s industries and supply chains from farmers to manufacturers, to distributors and retailers, are adopting smart products, procedures, and processes.

Industry 5.0

Industry 5.0 is a newer concept that focuses on collaboration between humans and machines. It builds on the foundation of Industry 4.0 to enhance productivity and innovation by emphasising human-centric approaches. This concept promotes synergy, allowing human creativity and machine efficiency to coexist in manufacturing environments.

Smart factories and automated manufacturing hubs represent a significant advancement where both Industry 4.0 and Industry 5.0 principles are implemented. These production facilities use machine learning algorithms to analyse market trends and generate insights quicker than human capabilities.

Singapore’s focus on advanced manufacturing underlines its efforts to keep up with global trends, and this approach ensures sustained growth and competitiveness in the global market by continuously adapting manufacturing industry strategies to incorporate the latest technological advancements.

2. Regional Growth

Access to regional trade agreements, such as the ASEAN Free Trade Area (AFTA), further enhances growth opportunities. Companies benefit from reduced tariffs and streamlined customs procedures, making cross-border trade more efficient and cost-effective.

Singapore's strategic location in Southeast Asia, coupled with its robust infrastructure and favourable business environment, makes it an ideal hub for regional growth and a base for ASEAN expansion. By expanding operations into neighbouring ASEAN countries, the country's manufacturing sector can tap into a diverse range of new markets, making this strategic move popular among businesses aiming to penetrate the Indonesian and Vietnamese markets, where interest is particularly high.

RHB's Project Loan offerings provide a critical financial tool for businesses pursuing such regional expansion. This Project Loan is tailored to support both domestic and overseas projects, making it an excellent choice for manufacturers who are venturing into regional markets like Indonesia and Vietnam. With these project loans, companies can secure the necessary capital to establish or scale operations, build new facilities, or enhance supply chain capabilities across borders.

3. Sustainable Manufacturing

Sustainable manufacturing is gaining momentum in Singapore as the nation further prioritises ESG (Environmental, Social, Governance) practices. With government initiatives such as The Singapore Green Plan 2030 emphasising eco-friendly practices, manufacturers are increasingly integrating sustainable manufacturing into their operations and making it a core aspect of their growth strategies.

The shift toward sustainable manufacturing involves adopting practices such as energy-efficient production, waste minimisation, and the use of renewable energy sources. Companies are also focusing on the circular economy model, which emphasises the reuse, recycling, and repurposing of materials to minimise waste and reduce environmental impact.

Adopting sustainable practices is not only a response to regulatory requirements, but also a strategic move to attract environmentally conscious investors and business partners. For instance, manufacturers are leveraging green financing options to fund their transition to sustainable practices. Eco-financing Loans, such as those offered by RHB, provide companies with capital at preferential rates, specifically for environmentally friendly projects.

4. Data-Driven Predictive Maintenance

Data-driven predictive maintenance is a focal point for modern manufacturing, especially among Singapore's large-scale asset-heavy industries. This approach leverages machine learning and data analytics to forecast potential equipment failures before they happen.

Predictive maintenance uses vast amounts of data collected from sensors installed on machinery. The data is then analysed to identify patterns that indicate wear and tear or other issues. The aim is to address these issues before they lead to equipment failure, and ideally result in:

• Reduced Unplanned Downtime: With predictive maintenance, factories can minimise unexpected equipment failures, thus maintaining continuous production.
• Better Cost Savings: By avoiding unnecessary repairs and extending the lifespan of machinery components, material costs can be saved.
• Improved Margins: Enhancing operational efficiency contributes to better profit margins due to fewer production halts and lower maintenance costs.

Industries in Singapore are increasingly adopting predictive maintenance due to its numerous benefits. By tapping into industry 4.0 technologies like 5G, IoT, and robotics, businesses can further amplify the effectiveness of predictive maintenance using real-time data and enhanced connectivity.

Opportunities for Manufacturing Industries

Singapore's manufacturing sector stands to benefit from a range of financial incentives and targeted talent development initiatives. These opportunities are crucial for enhancing operational efficiency and boosting their total manufacturing output.

Financial Incentives & Solutions

Singapore offers a variety of financial incentives to manufacturing businesses. Grants from the Economic Development Board (EDB) can help companies invest in advanced manufacturing technologies and infrastructure.

Apart from these incentives, private institutions like RHB also offer specialised and tailored financial solutions designed to support the unique needs of manufacturers — Trade Financing solutions can provide short-term options for manufacturing businesses, while our SME Fixed Assets programme helps SMEs obtain equipment for automation and upgrading in the long term. Such support enables businesses to scale operations, enhance innovation, and maintain a competitive edge.

Talent Development and Upskilling

A skilled workforce creates opportunities for most industries, and the manufacturing sector is no exception. Numerous training programmes are developed to equip workers with skills to operate and maintain advanced manufacturing technologies.

These programmes, such as those organised by the Singapore Manufacturing Federation, address the labour shortage and ensure that the workforce remains competitive and proficient. Initiatives may include partnerships with educational institutions, hands-on training sessions, and certification courses. These upskilling efforts are especially relevant as the industry evolves to include more automation and digitisation.

Prepare Your Business for the Future of Manufacturing with RHB

As the manufacturing industry continues to advance, businesses must remain agile in the face of emerging trends and opportunities. To navigate this evolving terrain successfully, businesses need to invest in cutting-edge technologies, upskill their workforce, and leverage available solutions tailored to the manufacturing sector.

RHB stands ready to support this transition with specialised financial products designed to help manufacturers capitalise on these trends, from project loans for regional expansion to eco-financing for sustainable initiatives. By partnering with financial institutions and embracing these emerging trends, Singapore's manufacturing businesses can position themselves at the forefront of innovation, driving growth and maintaining the nation's status as a global manufacturing hub.