MANUFACTURERS are bracing themselves for tough times ahead, as the unpredictable global economy, labour scarcity and restructuring take a toll on the industry.

Orders are slowing in some sectors, but there is hope that things will turn around, bosses said.

This comes after the labour movement warned this month that the manufacturing sector is most at risk of retrenchments as it hollows out.

Two in three of the workers retrenched from unionised companies last year - or around 1,475 workers - were from manufacturing firms, said the National Trades Union Congress.

Bosses are taking a cautious approach to the year ahead, given unpredictable oil prices and global uncertainties.

"We're starting to see orders slow down this first quarter a bit more than previous years, and if this situation continues until April, then some companies may take more drastic measures," said Mr Sam Chee Wah, general manager of precision engineering firm Feinmetall Singapore.

His company will take a longer Chinese New Year break to save a few days of costs.

Economists and unionists said the situation is not dire, and encouraged companies to make use of the lull period to improve their set-up and workforce.

"Some companies may be relocating or shedding workers as they take on a more capital-intensive business model," said Barclays economist Leong Wai Ho.

But these are mostly proactive decisions made by individual firms, not big waves of relocation.

The electronics and electrical sector was hit hard last year, but the 1,000 or so retrenchments in unionised companies was better than the over-3,000 that were let go every year in the early 2000s, said Mr Tan Richard, general secretary of the United Workers of Electronic & Electrical Industries.

"Some companies that were in the red have moved up to black (last year)... some have new products coming in from parent companies," he added.

A number of bosses are turning to shorter work weeks to cut costs and are sending workers for training rather than laying them off, said Metal Industries Workers' Union president Toh Hock Poh.

Training workers and investing in technology now can help firms cope when product orders return.

DBS economist Irvin Seah said: "Reskilling and upgrading the workforce is the only way to stay relevant and competitive."