SINGAPORE: Singapore is losing export competitiveness in the region and this is due to rising costs, according to Credit Suisse economists. Their research also found that the Republic’s small, trade-dependent economy is losing market share in the global goods trade, which means export growth will likely remain weak in the coming years.
Vietnam, the Philippines and China are winning the export race in Asia, according to the report by Credit Suisse head of South-east Asia and India economics and strategy Santitarn Sathirathai, economist Michael Wan and Mr Ray Farris, its head of Asia macro strategy.
The top three exporters have been gaining market share, thanks to improving competitiveness and having the right product mix. Meanwhile, Indonesia, Taiwan and Singapore have underperformed global trade in recent years, driven by an erosion in their export competitiveness. Economies in the “middle” include India, Thailand, Malaysia, and South Korea.
In Singapore, “wages have continued to rise in spite of low productivity growth, depressing corporate profits and pushing up unit labour costs, driven in part by the foreign- labour curbs imposed since 2010”, the report noted. As a result, investment growth has slowed and various surveys have indicated that businesses in Singapore intend to invest less.
“All these bode ill for the prospect of goods exports moving forward,” the report added. While Singapore’s export growth has underperformed the pace of global trade, Vietnam’s year-on-year export growth has outpaced global trade growth by 12 to 14 per cent on average since 2000.
