Singapore’s industrial sector is bracing for turbulent times as recent US tariff announcements create uncertainty, impacting relocations and expansions. Calvin Yeo, Head of Occupier Strategy and Solutions at Knight Frank Singapore, noted that the ongoing tariff changes compel industrial players to adopt a cautious stance. The Singapore economy grew 3.8% year-on-year in Q1 2025 but contracted 0.8% quarter-on-quarter, with the manufacturing sector expanding 5.0% year-on-year but shrinking 4.9% quarter-on-quarter.
The Economic Development Board reported a 1.3% year-on-year decrease in manufacturing output in February 2024, breaking a streak of monthly expansions. Despite this, the business outlook for January to June 2025 remains positive at 16.0%, up from 10.0% in the previous period. However, this optimism was recorded before the US tariffs were announced in April 2025, which have since unsettled the global outlook.
Industrial property sales in Singapore saw a decline, with total sales value dropping 33.9% quarter-on-quarter to $500m (S$680.9m) in Q1 2025. Leasing activity also slowed, with a 0.4% quarter-on-quarter decline in rental transactions. The US tariffs are expected to slow global trade flows, impacting Singapore’s manufacturing, electronics, and logistics sectors due to the country’s reliance on exports.
Despite these challenges, Singapore remains an attractive investment hub. The construction sector is poised for growth with large projects like Changi Airport Terminal 5 and Marina Bay Sands expansion. JTC has announced enhancements to the industrial land lease framework, offering more flexibility in renewals to support businesses during this uncertain period.
