Singapore’s manufacturing sector took a sharp hit in April 2025, marking its steepest decline since the early days of the pandemic. The slowdown comes amid growing global trade tensions and weakening external demand.
Data from the Singapore Institute of Purchasing and Materials Management shows that the Purchasing Managers Index, or PMI, fell to 49.6 in April. This is one point lower than in March and indicates the first contraction in 19 months. A PMI below 50 signals that the manufacturing sector is shrinking.
The electronics sector, one of Singapore’s strongest industrial contributors, also declined. Its index dropped to 49.8, falling by 1.1 points and ending a 17 month streak of expansion. This drop suggests that demand for tech products is cooling more rapidly than expected.
One major factor behind the slowdown is a new wave of tariffs announced by United States President Donald Trump. On April 2, he introduced a set of measures under the “Liberation Day” trade plan. While these tariffs are currently targeted at China, their wider impact is being felt throughout Asia.
Economist Chua Han Teng from DBS Bank said this is the sharpest monthly decline in factory activity Singapore has seen since early 2020. He warned that a shift towards more protectionist policies worldwide could have lasting effects on export driven economies like Singapore.
Singapore’s manufacturing industry is deeply connected to the global supply chain, especially in areas like semiconductors and pharmaceuticals. This connection makes the economy more vulnerable to changes in global trade policy. If the United States extends tariffs to include these products, Singapore could face further pressure in the months ahead.
Chua noted that the electronics and biomedical sectors are particularly exposed. He added that if pharmaceutical imports into the United States become more restricted, Singapore could suffer more than its regional peers.
Elsewhere in the region, factory output is also cooling. China’s official PMI dropped to 49 in April, down from 50.5 in March. This is the fastest decline in more than a year and reflects a broader slowdown in industrial activity across Asia.
For Singapore, the timing of this contraction is challenging. While domestic demand remains relatively stable, the external environment is becoming more uncertain. Businesses may need to prepare for slower growth and possible supply chain disruptions in the second half of 2025.
Moving forward, Singapore will need to focus on strengthening its trade relationships, improving industrial efficiency, and exploring new markets. These steps may help reduce the impact of future shocks and keep the economy resilient.
The coming months will be a key test of how well Singapore can adapt to global shifts. As trade risks grow and manufacturing weakens, flexibility and innovation may be the best tools for staying competitive.