Singapore services firms say business will get worse while manufacturers see no change

Singapore's services firms expect less favourable business conditions. Manufacturers, on the other hand, see no change in business conditions over the next six months.
Singapore's services firms expect less favourable business conditions. Manufacturers, on the other hand, see no change in business conditions over the next six months. ST PHOTO: LIM YAOHUI

SINGAPORE - Singapore's services firms are still mired in gloom, even if their outlook has improved from the low they hit three months ago. Manufacturers, on the other hand, see no change in business conditions over the next six months.

The Singapore Economic Development Board (EDB) and Statistics Singapore released on Friday (April 29) separate surveys of firms' business expectations for the April-September period. The studies calculate the "net weighted balance" which gives the difference between the proportion of optimistic and pessimistic firms.

A majority of manufacturers (a weighted 71 per cent) expect business conditions for April to September to remain unchanged, the EDB survey showed. A weighted 15 per cent of manufacturers expect conditions to improve while a weighted 14 per cent think they will deteriorate. Overall, a small 1 per cent more expect things to improve compared with the last survey three months ago.

For the services sector, a net weighted balance of 13 per cent of firms expect less favourable business conditions. While this was an improvement from the 18 per cent figure in the previous quarter's survey, it was in stark contrast to the year-ago survey when a net weighted balance of 3 per cent of firms expect things to improve.

For manufacturers, transport engineering firms were the most pessimistic, with a net weighted balance of 28 per cent expecting business to deteriorate. This gloom was largely felt by the marine and offshore engineering segment, hit by cancelled orders and spending cuts from upstream offshore exploration and drilling firms amidst as oil prices slumped.

Precision engineering firms were the most optimistic, with a net weighted balance of 27 per cent expecting business conditions to pick up slightly. The semiconductor equipment and bonding wires industries anticipate a rise in orders in the next three months.

For the services sector, the gloom was widespread with all industries expecting conditions to get worse, with the exception of information & communications and recreation, community & personal services. Firms in the real estate industry were the most pessimistic, recording a net weighted balance of -36 per cent. Developers continue to cite government cooling measures - the Additional Buyer's Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR) - as well as the uncertain economic situation for the weak demand in the property market.