Trade sector to sustain growth in early 2025

Additional protectionist measures may affect longer-term trajectory.

Trade-related sectors, especially electronics, are expected to sustain growth into early 2025, driven by export demand and pre-emptive production boosts.

In its report, UOB said the ongoing upturn in the electronics cycle would likely provide a crucial tailwind, supported by strong export demand and pre-emptive production increases ahead of anticipated trade policy changes, such as the proposed tariffs under the "America First" policy in the United States.

However, it noted the longer-term trajectory for the remainder of 2025 is less certain. Several downside risks could weigh on growth such as the the possibility of additional protectionist measures, which may disrupt global trade flows and impact export-driven industries.

Additionally, UOB said the electronics cycle, a significant driver of recent industrial production gains, may have already peaked. Any slowdown in this sector could ripple through related industries, tempering overall manufacturing momentum.

Furthermore, uncertainty surrounding the pace of monetary easing by major central banks adds another layer of complexity, as shifts in global interest rates could influence both investment flows and demand conditions.

Whilst the initial months of 2025 present opportunities for sustained growth in Singapore’s manufacturing and trade-related sectors, a combination of external risks and potential cyclical changes underscores the need for cautious optimism in forecasting the year.