SINGAPORE : Fixed asset investments in precision engineering will reach about S$400 million this year, according to forecasts from the Economic Development Board (EDB).

Speaking at an industry event on Thursday, the EBD estimated that about 5,000 jobs in the sector would be created in the next four years.

But it pointed out that the sector faced a key challenge in attracting local talent.

About 2,000 jobs are created in the precision engineering sector every year.

But according to the EDB, Singaporeans shun lowly-skilled jobs in the sector.

It said a key challenge ahead would be to groom more local talent to meet future manpower needs.

"There are always more jobs available than Singaporeans. But jobs vary, from highly-skilled jobs to more operator-type jobs... To a large extent, you'll find Singaporeans going for jobs that require higher skills," said Chang Chin Nam, director of Precision Engineering at EDB.

Entry-level pay for a precision engineering technician is about S$1,000 to S$1,200 a month.

The EDB said this is nudging up every year.

This is adding to the pressure that the sector is facing - increasing regional competition.

Precision engineering forms the backbone of Singapore's manufacturing sector.

But increasingly, it is facing competition from low cost producers like China, India, Thailand and Eastern Europe.

Recognising that Singapore cannot compete on cost alone, the EDB is trying to attract specialists in high cavity mould production and ultra-precision engineering.

The EDB is trying to evolve precision engineering, beyond simple contract manufacturing to more complex R&D-based processes.

"Robotics technology will find greater use and applications in many sectors. What we have in Singapore is our strength in mechatronics, and robotics is basically mechatronics. We have strengths in that. We are exploring whether strengths we have today can be applied in some new vertical such as robotics and automation to serve these potentially new markets," said Chang.

The EDB projects that the precision engineering sector will produce S$28 billion worth of output by 2018.

The importance of the precision engineering sector was also highlighted by Minister of State for Trade and Industry Lee Yi Shyan on Thursday.

He noted that the industry had helped Singapore achieved strong leadership in many sectors such as the manufacturing of hard disk drives, semiconductor equipment, machine tools, aerospace, as well as oil & gas equipment.

"We account for 20% of the world's hard disk drives and are a leading location in Asia for the production of oil & gas equipment. Last year, the precision engineering industry achieved manufacturing output of S$21.8 billion, growing 10.7% over 2005. This industry employs 94,000 workers and contribute 9.6% to the total manufacturing output," said Mr Lee.

He noted how the precision engineering industry had evolved from a skills-based capability in the 1970s into a knowledge and capital intensive sector.

But he also stressed that the industry needed to stay ahead of competition and maintain its strengths in three key capabilities - technological prowess, market knowledge and manpower. - CNA /ls