Singapore factory activity rises even as US imposes tariffs on pharmaceuticals

Experts expect limited impact as most large drugmakers likely to be exempted

- Annabelle Liang Correspondent

Singapore’s manufacturing output picked up in September even as the Trump administration added pharmaceuticals, a major export from the Republic to the US, to its list of goods under tariffs.

Experts said the impact of the 100 per cent levy, which took effect on Oct 1, is likely to be limited as most large pharmaceutical companies here are building factories in America and could be exempted from the tax.

US pharma giant Pfizer, for instance, received a three-year reprieve from the sectoral tariff earlier this week. It is the biggest contributor to Singapore’s pharmaceutical manufacturing output.

The purchasing managers’ index (PMI) - a barometer of the overall manufacturing industry’s health — rose from 50 points in August to 50.1 points.

The electronics sector, which accounts for 40 per cent of manufacturing output, recorded a PMI of 50.7 points, marking its fourth straight month of expansion.

A PMI reading above 50 indicates growth; one below suggests a contraction in output.

The monthly survey, which is gathered and compiled by the Singapore Institute of Purchasing and Materials Management (SIPMM), did not offer a separate snapshot for the pharmaceutical sector.

The sector accounts for around 13 per cent or US$4 billion (S$5.2 billion) of exports from Singapore to the US.

“Despite numerous challenges of uncertain global trade policy and sectoral tariffs, the outlook of the Singapore manufacturing business remains positive as demand has started to build up towards the year-end festive season,” said SIPMM executive director Stephen Poh.

DBS Bank senior economist Chua Han Teng took a more cautious view. He said that although PMIs have edged up, they were lower than readings issued at the start of 2025, suggesting that manufacturers are contending with a volatile economic landscape and the risk of softening external demand.