Less than a fifth of Singapore's manufacturers and services firms expect business to improve in second half of 2015

A scientist in a lab in Singapore.
A scientist in a lab in Singapore.PHOTO: BLOOMBERG

SINGAPORE - Manufacturing and services firms, on the whole, are both not that 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 on Friday.

Of the more than 400 manufacturers polled by EDB between June and July, 16 per cent expect the business climate to improve, just up from 14 per cent that expect it get worse. The rest - 70 per cent - 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 to 15 per cent foreseeing slower business, while just over two-thirds - 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 a lot 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-year. This margin is comparable to the 3 per cent registered a quarter ago, but much lower than the 13 per cent posted for the same period last year.

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

"Developers continue to cite the series of government measures, including the Additional Buyer's Stamp Duty (ABSD) and the Total Debt Servicing Ratio (TDSR) framework, as the reasons for their negative outlook," said DOS.

On the other hand, prospects look brightest for the food & 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 year-end holiday period to boost business volumes.