Manufacturing, services still wary about prospects

Manufacturing and services firms, on the whole, are not too upbeat about business prospects for the rest of this year, according to the findings of separate quarterly surveys by the Economic Development Board (EDB) and the Singapore Department of Statistics (DOS) released yesterday.

Of the more than 400 manufacturers polled by EDB between June and July, 16 per cent expect the business climate to improve, slightly more than the 14 per cent who expect it get worse. The rest - 70 per cent - do not expect any change.

The DOS found that 17 per cent of the 1,500 firms polled between June and mid-July expect better business this half-year compared with the previous six months. That compares with 15 per cent anticipating slower business, while just 68 per cent expect no change.

For manufacturers, the positive net weighted balance - the difference between the proportion of optimistic and pessimistic firms - is 2 per cent, which is lower than the 5 per cent seen in the last quarterly survey done three months ago.

The biomedical manufacturing cluster was the most optimistic, with a net weighted balance of 33 per cent of firms anticipating better business conditions in the second half of this year. But the chemical and transport engineering clusters were far gloomier.

For the former, a net weighted balance of 15 per cent of chemical firms see business getting worse.

Within the transport engineering cluster, the marine and offshore engineering segment saw the slowdown in new orders continuing this half-year as weak oil prices continue to hurt offshore exploration and drilling activities.

Companies in the services sector were, on the whole, feeling the same about their business prospects as they were three months ago.

But they were more optimistic a year ago. A net weighted balance of 2 per cent of services firms are bullish about their business prospects for the second half. This margin is comparable with the 3 per cent registered a quarter ago, but much lower than the 13 per cent posted in the same period last year.

All industries in the services sector, save real estate (minus 19 per cent) and wholesale trade (minus 5 per cent), expect better business conditions in the second half-year.

Prospects look brightest for the food and beverage services sector, with a net weighted balance of 21 per cent. The accommodation industry's 14 per cent net weighted balance reflects optimism from hotels. They expect the upcoming Formula One night race and the year-end holiday period to boost business volumes.

A version of this article appeared in the print edition of The Straits Times on August 01, 2015, with the headline 'Manufacturing, services still wary about prospects'. Print Edition | Subscribe