Manufacturers are becoming more optimistic about the business outlook for the next six months, though service companies remain less cheerful, according to surveys released yesterday.
The Economic Development Board (EDB), which polled manufacturers, found a net weighted balance of 4 per cent of firms expect conditions to improve over the October to March period, compared with the third quarter.
The net weighted balance is the difference between the percentage of firms that expect improvement and those that expect conditions to worsen. Individual responses are weighted by their contribution to employment and value added.
Of the 432 manufacturers polled, 95 per cent responded, EDB said.
Most manufacturers polled (a weighted 70 per cent) expect the business situation in the six months ending March 2017 to be similar to a quarter ago.
A weighted 17 per cent of manufacturers expect conditions to improve while a weighted 13 per cent forecast a deteriorating outlook.
Within manufacturing, the electronics cluster is the most optimistic, with a net weighted balance of 25 per cent of firms anticipating improved conditions ahead. This optimism is largely led by the semiconductor segment, in view of the seasonal pick-up in demand for chips.
Meanwhile, the Department of Statistics survey of the services sector has found a net weighted balance of 8 per cent of firms expect less favourable business conditions in the October to March period, compared with April to September.
This is less optimistic than the net weighted balance of 6 per cent of firms expecting less favourable business conditions registered in the previous quarter's survey.
About 1,500 services companies across various sectors were polled.
A weighted 13 per cent of firms polled in the latest survey were optimistic about business conditions in the October to March period, while a weighted 21 per cent foresee a weaker outlook.
Most firms anticipate the level of business activity to be the same.
Within the services industry, the retail trade and food and beverage services sectors are among those which foresee more favourable conditions in the period, which coincides with the year-end school holidays and the festive season.
The real estate, transport and storage and wholesale trade sectors are less optimistic.
CEI Contract Manufacturing managing director Tan Ka Huat said the company has been hit hard by the slowdown in the oil and gas sector but is making up for it with business from other industries.
The company makes industrial and laboratory equipment for the medical technology and life science sectors, among others.
"Sentiment is quite poor on the whole," said Mr Tan, adding that sales softened in the second half of the year against the first half.
"But we are well-diversified... Numbers for the full year will likely be stable compared with last year."