Business sentiment of manufacturers, services firms improves slightly for second half of 2017

Workers at Add-Plus, an electronics manufacturing company that makes printed circuit boards.
Workers at Add-Plus, an electronics manufacturing company that makes printed circuit boards. PHOTO: ST FILE

SINGAPORE - While the bulk of firms in the manufacturing and services sectors expect the business environment to remain the same as in the second quarter of this year, a bigger minority expect things to improve for the rest of the year, according to two quarterly surveys released on Monday (July 31).

The Economic Development Board (EDB) found that a weighted 80 per cent in the manufacturers expect conditions for the second half-year to remain similar to a quarter ago. A weighted 12 per cent of manufacturers expect conditions to improve while a weighted 8 per cent foresee a softer business outlook.

Thus, a net weighted balance of 4 per cent of manufacturers anticipate better business for the July to December period. The net weighted balance is the difference between the percentage of firms expecting conditions to improve and those expecting the opposite.

The EDB survey also found that the biomedical manufacturing cluster was the most upbeat, while the precision engineering and electronics firms continue to be optimistic. On the other hand, transport engineering firms - with the exception of aerospace firms - and general manufacturing firms - expect a tougher business environment in the second half-year.

A separate survey by the Singapore Department of Statistics, found a net weighted balance of 5 per cent of firms in the services sector see more favourable business conditions in the July to December. This compares to -1 per cent in the previous quarter's survey.

So, the latest survey shows 67 per cent of services firms see business activity remaining the same, 19 per cent expect improvement, while 14 per cent see business slowing down.

In the more optimistic camp are the firms dealing with food & beverage, accommodation, business services - except for real estate firms - and financial & insurance services.

Feeling pessimistic are transport & storage services, real estate and retail companies.