Pharmaceutical production in Singapore soared 121.8% this May compared to May 2009’s levels, and was the main driver behind the 117.% year-on-year rise reported for biomedical manufacturing during the month, say new government figures.

However, shipments of pharmaceuticals fell 32.8% in May, after having declined 27.8% in April this year.

Biomedical manufacturing output in Singapore was up 78% during the first five months of 2010 compared with the like, year-earlier period, and the sector continued to provide a massive boost to the country’s production as a whole; year-on-year, Singapore’s total manufacturing was up 58.6%, but this falls to 30.6% if biomedical manufacturing is excluded, while month-on-month for May the increase was 5.2% or just 0.1% if biomedical production is taken out, says the Ministry of Trade and Industry.

Last year, the pharmaceuticals sector contributed around 20% of Singapore’s total manufacturing output, says a new report published yesterday by Business Monitor International (BMI).

BMI's Business Environment Ratings (BER) table for third-quarter 2010 ranks Singapore fifth of the 16 markets which it assesses in the Asia Pacific region. This marks a steady improvement from its eighth-place ranking in fourth-quarter 2009 and seventh position in first-quarter 2010, and reflects the likelihood that, due to its openness, Singapore will benefit from the upturn in trade in the region, says the firm.

Globally, Singapore ranks 22nd out of the 82 pharmaceutical markets surveyed by BMI and, while the nation’s consistent and transparent medicine regulations are attractive to multinational drugmakers, its fundamental drawback is a small and mature pharmaceutical market that is growing slowly. In the medium term, BMI says it is expecting Singapore to fall down the ratings, as emerging countries such as Vietnam and Indonesia become more alluring to foreign firms selling patented products.

The report points out that while Singapore has increasingly turned to pharmaceuticals as a key trade commodity given the waning importance of technological exports - although the economy still remains dependent on exports of electronic goods - the drawback with pharmaceutical exports is that manufacturing output fluctuates on a monthly basis, as factories often lie dormant for weeks to be cleaned between the manufacture of batches of different medicines.

Turning to prospects for the domestic market, BMI notes that Singapore's per capita expenditure on pharmaceuticals is above average for the region, at about US$114 (or 0.34% as a percentage of Gross Domestic Product (GDP) last year. However, this figure compares unfavourably with its western European counterparts, indicating some potential for further growth, and the study forecasts that per capita spending on medicines will rise to $126 in 2010, although it will also decline to 0.33% of GDP.