Firms across the manufacturing and service sectors are now a bit more upbeat about business prospects than they were three months ago, according to results of surveys by the Economic Development Board (EDB) and the Department of Statistics (DOS) released yesterday.
A weighted 15 per cent of factory bosses polled by the EDB expect business conditions to improve over the next six months, compared with just 7 per cent who said so in January.
Similarly, a weighted 14 per cent of factory bosses think business will deteriorate, a sharp fall from the 29 per cent who predicted a slump in January.
Of the 433 manufacturers polled, 96 per cent responded, and individual responses were weighted by their contribution to employment and value added, said the EDB.
In the service sector, optimism was lined with far more caution. More firms continued to foresee slower business over the next six months than those expecting conditions to improve, although the number of optimists has crept up slightly.
A weighted 12 per cent of the 1,500 service firms polled by the DOS from March to April were optimistic, up from 10 per cent in January.
THE CHINA FACTOR
We believe the market is underestimating STB's extensive digital marketing efforts in China, which has kept Singapore a popular destination for Chinese tourists.
CREDIT SUISSE ANALYST GERALD WONG
A weighted 25 per cent of firms polled were pessimistic, down from 28 per cent in January.
The greatest pessimists were firms from the real estate industry such as property developers. The information and communications cluster and recreation and healthcare sector were the only two segments where optimists outnumbered pessimists.
But the slight uptick in optimism has good grounds - there is a chance that tourism could give the service sector a lift this year, said Credit Suisse analyst Gerald Wong.
Mr Wong expects tourist arrivals to hit a record high of more than 16 million this year, above the Singapore Tourism Board's (STB) expectations of between 15.2 million and 15.7 million, and better than the high of 15.6 million reached in 2013.
"We believe the market is underestimating STB's extensive digital marketing efforts in China, which has kept Singapore a popular destination for Chinese tourists," he said.
"The strong pick-up in tourist arrivals has been driven by Chinese tourist arrivals, which recovered strongly from mid-2015."
A tourism rebound is also being bolstered by the rise in Changi Airport passenger volumes, Singapore Airlines passenger volumes and revenue per available hotel room compiled by the STB, Mr Wong said.
Within the manufacturing clusters, precision engineering firms were the most upbeat, with semiconductor equipment and bonding wire firms anticipating higher orders in the next three months.