The industry’s contribution to economy halved to 1% in just 4 years.
Reuters reports that even if the offshore and marine industry has broken a three-year losing streak, executives still think the return to the glory days is unlikely.
A 28.3% YoY jump in output from the marine and offshore engineering sector in June was the biggest since March 2014. However, Singapore’s battered companies are bracing for a long period of convalescence. The specialist divers and engineers servicing rigs in Southeast Asian waters have moved on and may be unwilling to return for lower wages.
“Whilst we may be at the bottom of the cycle, we view the recovery as more gradual with the risk of most new order wins being low or zero-margin jobs,” said Ajay Mirchandani, head of research for ASEAN at JP Morgan. “We won’t be anywhere near the glory days for the foreseeable future.”
The offshore and marine engineering industry’s direct output contribution has more than halved since 2014 to about 1% of the city-state’s economy, but its significance extends beyond manufacturing: real estate has been pressured as companies needed less office space and fewer workers needed housing. Well-paid engineers have stopped browsing the shopping malls. And executives doubt they can bring them all back.
“During this whole crisis ... we lost quite a lot of this talent to other industries, so to build it up again will take some time,” said Sean Lee, chief executive of Marco Polo Marine, which owns offshore support vessels, tugs and barges and recently finished restructuring its debt after getting “almost zero” enquiries in the previous two years.
“It is going to be difficult to attract new people or even bring back those who have left,” he said.
Read the full report here.
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