Singapore Shipping Report Q1 2016
BMI View: Growth in both the container and tonnage spheres is set to be steady over both the short andmedium term at the port of Singapore. We anticipate box throughput to increase by 1.60% in 2016, whiletonnage throughput is set to grow by 3.10%. We continue to see upside risk presenting towards the end ofour forecast period in the form of the Trans Pacific Partnership trade deal, which is advancing and willincrease the port's trade flows. Singapore also has considerable trade linkages to China, with exposure viaboth domestic export and re-export activity. The port city reaps considerable income from trade servicesrelated to port usage. A slowdown in global trade, rather than a fall in Chinese investment, is the biggestrisk to Singapore, although we would still expect falling Chinese import demand to weigh heavily on dollarinflows, subsequently reducing imports and negatively impacting real GDP growth.
Singapore is also grappling with a restructuring of its domestic labour market, which has put significantpressure on exporters who face stiff competition from the city-state's regional peers. These strains have beenreflected by a particularly poor performance in industrial production, which has contracted in y-o-y termsfor seven straight months (see 'Difficult Trade Outlook As Cyclical, Structural Issues Weigh', September22).
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