Services sector more downbeat about business prospects while manufacturers slightly more upbeat

Manufacturers were on the whole slightly more optimistic than they were three months ago.
Manufacturers were on the whole slightly more optimistic than they were three months ago. PHOTO: ST FILE

SINGAPORE - Firms in the services sector have turned more downbeat about business conditions in the next six months but manufacturers are slightly more upbeat, according to separate surveys released on Monday (Oct 31).

The Economic Development Board (EDB) shared its findings on manufacturing firms, while the Department of Statistics (DOS) reported on services sector.

The services sector contributes to about three-quarters of Singapore's economic output. A net weighted balance of -8 per cent of firms in this sector - that is, the difference between the weighted percentages of those who were optmistic and pessimistic - expect things to improve in the short term, said DOS. This is also less optimistic than the -6 per cent recorded in last quarter's survey.

The poll found 13 per cent of services firms were upbeat about business conditions in the October-March period while 21 per cent for things to get worse. Two-thirds of firms expect business to remain the same.

Retailers were the most optmistic, probably because of year-end seasonal sales. Firms in the food & beverage and information & communications business were also more upbeat.

Real estate, transport & storage and wholesale trade businesses were the most gloomy about their prospects.

Manufacturers, on the other hand, were on the whole slightly more optimistic than they were three months ago.

Manufacturing represents about a fifth of the economy.

A net weighted balance of 4 per cent of manufacturers expect conditions to improve in the October-March period, said EDB.

Seven in 10 manufacturing firms (a weighted 70 per cent) expect business conditions to remain similar to a quarter ago. A weighted 17 per cent expect things to improve while a weighted 13 per cent see them worsening.

Within the manufacturing sector, the electronics cluster was the most optimistic, with a net weighted balance of 25 per cent of firms anticipating improved business conditions ahead. This optimism is largely led by the semiconductors segment, in view of the seasonal pick-up in demand for chips. However, the computer peripherals and infocomms & consumer electronics segments expect business situation to deteriorate compared to the preceding quarter.

In the biomedical manufacturing cluster, a net weighted balance of 5 per cent of firms projects business situation to improve.

The precision engineering cluster expects business conditions to remain the same.

In the transport engineering cluster, a net weighted balance of 5 per cent of firms foresee business to worsen. This is largely due to the marine and offshore engineering segment as offshore exploration and drilling activities are expected to remain lacklustre in the months ahead.

A net weighted balance of 9 per cent of firms in the chemical cluster expects business prospects to weaken. The petroleum segment continues to be concerned with weak refining margins while the petrochemicals and specialties segments anticipate a slowdown in business activities ahead due to seasonal factors.

The general manufacturing industries cluster is the least optimistic, with a net weighted balance of 12 per cent of firms expecting things to worsen. While firms in the food, beverage & tobacco segments expect business conditions to improve due to higher festive orders, the printing and miscellaneous industries segments foresee weaker business prospects ahead. The miscellaneous industries segment anticipates softer business condition due to lower demand for construction related materials.