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SINGAPORE: An expected economic slowdown from the US and Europe has hit Singapore's biomedical sector. Industry watchers noted that other factors have also caused the usually volatile sector to see a longer-than-expected slowdown.
Biomedical manufacturing output has notched up two months of losses, followed by a marginal four per cent recovery on-year in June.
Some observers said the industry has been hit by lower R&D activity due to an anticipated economic slowdown in the US and Europe.
Gabriel Yap, senior dealing director, DMG & Partners Securities, said: "Historically, biomed is a cyclical industry. But it does seem that this time around the structural downturn does look a little longer than usual.
"I think it is actually a confluence of factors. One is lower production of the necessary drugs that's been exported to the key countries that have suddenly seen a sharp slowdown."
The long period required for drug approval has also slowed down productivity.
These factors, along with increasing global competition, have created pricing pressures that will affect the industry in the short term.
In the long term, industry players are seeing a rosier picture. The Economic Development Board (EDB) said it is still speaking with a multiple number of companies to set up in Singapore to serve the global and Asian markets.
Beh Kian Teik, deputy director, Biomedical Sciences, EDB, said: "The market will be growing and for us, in Singapore, a lot of the existing plants that we have here are consistently and continually introducing new medicine into the plant here. All these will take time - maybe a year or two - before it shows up on the manufacturing output.
Biomedical manufacturing currently accounts for up to three per cent of Singapore’s GDP. - CNA/vm
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