Singapore manufacturers views globalisation as an opportunity for future growth and development
Singapore manufacturers views globalisation as an opportunity for future growth and development
Singapore, 28 November 2007 - According to research conducted by Grant Thornton International, Singapore was placed third on the list of countries that perceive globalisation as an opportunity. With their ability to produce goods at a lower cost than the developed economies, Asian manufacturers deem globalisation as positive as it allows them to compete rigorously in the global marketplace.
Manufacturing and exporting
Manufacturing output in emerging economies is escalating alongside rapid global manufacturing growth. Malaysia and India head the list having responded forcefully to the need to compete in the international manufacturing market. This was followed closely by Singapore, which found abundant opportunities with globalisation, including accessibility of new markets and cost savings via outsourcing.
Aw Eng Hai, a partner with Foo Kon Tan Grant Thornton, the Singapore member firm of Grant Thornton International said, “The rise in global sales highlighted the importance of exporting in Singapore. Exporting has become a necessity for the economy as it competes vigorously in the global marketplace. When we surveyed businesses about the impact of globalisation, 64% of businesses in Singapore had optimistic response, viewing it as an important contributing factor to the growth of the economy. Globalisation has brought about an increase in numbers of manufacturers exporting, thus proving manufacturing a key investment focus. With a surge in demand for consumer durables, and the advancement of emerging economies, manufacturing will be a key pillar of Singapore’s economy”.
With Asian economies leading as top manufacturing producers in the world, globalisation is being perceived as a threat to some manufacturing businesses. According to the report, manufacturers in Thailand, Australia and New Zealand see globalisation as a threat rather than an opportunity. This indicates increasing concerns about greater competition from Asian manufacturers.
Raw material and energy cost pressures
As surveyed by Grant Thornton International, global manufacturing businesses were most concerned about the impact of raw materials and energy on cost pressures. In Singapore, 69% of manufacturing businesses view raw materials as having the biggest impact on cost pressures, compared to 61% of global manufacturers; while 27% of Singapore manufacturers reported energy costs, as compared to 45% of global manufacturers. Other top concerns include staff cost, cited by 46% of local manufacturing businesses, which is higher than the global impact of 36%.
Manufacturers are more concerned with the costs of raw materials, energy and transport while figures show that property and staff are the key concerns for all businesses.
