A Time to Adjust

The rate of growth of Asean economist have on the whole slowed, with some sector and sub sectors actually showing negative growth on year-on-year, or quarter-on-quarter comparison. As the prediction of some people that half of a dozen minor cyclical shakeouts, each one with own particular nuances. I am not suggesting that we be complacent but I believe too much time and anxiety are being expected by too many economist on these growth forecast.

 

It’s important to remember that the region has had extraordinary high growth rates and overall prosperity for many years. Because our economist are now global in substance and, most of them are in high technology sector, it’s inevitable that we experience shorter and sharper cycles of adjustments.

 

For some time now, our readers in the metalworking sector have been complaining of lower machinery sales, higher operating costs, manpower difficulties, lower throughputs and a lost of related problems. Even companies that have relocated their manufacturing bases overseas are encountering problems.

 

What I find extraordinary is the way in which a large number of economist from various institutions and financial houses, keep churning out revised GDP rates, at a drop of a new set of statistic. A shade of a point here and there is made, accompanied by reasons that are faced daily by businessman, and then followed by hedged forecasts.

 

Recently, I saw in a long column of reviewed forecast by about 8 financial houses, predicting Singapore’s growth this year, all within half a percentage point of each other, all within the range of the official Government forecast. I suppose the winner will be one cosset to the actual, perhaps to within two decimal points. Many were long on the obvious, others were keen on sectored statistic impacts, and only some on wider issues. Almost non offered possible solutions.

 

The economist say that the fall in manufacturing output, as well as export, in the electronics industry, is likely to affect Singapore and Malaysia  the most, and Thailand and Philippines the least. Although some with 20/20 hindsight say the signs were there many months age, the reason appears simple electronics account for 52% of the manufacturing output in Singapore, 66% of its total exports and it contributes 14.6% to the country’s GDP. In Malaysia’s case the figure are 18% , 30% and 6% respectively. A 10% change in electronics output on GDP growth results in a 1.46% change in Singapore’s GDP but only 0.16 % change in Malaysia, a 0.31% change in Thailand and mere ).31% change in Thailand and a mere 0.09% change for the Philippines. These estimates are quoted from a recent report by Crosby Securities in Singapore. (From editorial Equipment News Magazine)