Singapore's manufacturing sector growth should normalize by 1H 2027, says OCBC chief economist Selena Ling in a commentary. While October's manufacturing PMI pulled back slightly, it marked the 15th straight month of expansion, according to the Singapore Institute of Purchasing and Materials Management.

Recent volatility in the global equity market suggests that some investors are uneasy about the sustainability of the global artificial intelligence investment boom, Ling says. However, even if the AI cycle cools, Singapore's exposure extends beyond semiconductor production.

The city-state's role in semiconductor equipment, precision engineering, components, data storage, and advanced manufacturing services could provide some buffer against a potential cooling AI boom, Ling says.