Output from the manufacturing sector shrank 11.5 per cent last year, led by a slump in electronics of more than 20 per cent.
Official figures for last month and the full year show there were signs a bottom may have been reached, according to the Economic Development Board.
The statistical snapshot came as ministers continued to advise that despite gathering recovery optimism, they remained cautious about the timing and strength of any upturn.
Deputy Prime Minister Lee Hsien Loong, who is also finance minister, said: 'I think that it is better to be careful and conservative because you don't want to give people false expectations that we have cruised through a nightmare and everything will be well.'
In its annual summary, the board said last year's 'nightmare' saw electronics output drop 21.4 per cent compared with 2000, engineering sank 7.5 per cent and chemicals 0.1 per cent. Elsewhere, output from biomedical sciences increased 10 per cent.
Manufacturing accounts for 25 per cent of Singapore's gross domestic product, which last year contracted 2.2 per cent, the worst performance since 1964.
The board said: 'The three-month moving average of the seasonally adjusted month on month growth, which better reflects the momentum of growth in recent months, showed manufacturing grew 0.5 per cent [in December], after a 4.2 per cent increase in November.'