Manufacturing and service firms are pessimistic about prospects for the next six months given the way the Covid-19 pandemic is belting the global economy.
Their bleak sentiments were noted in separate surveys released by the Economic Development Board (EDB) and the Department of Statistics (SingStat) yesterday.
All segments of the service sector expect business activity to deteriorate for the period between last month and September this year, according to SingStat.
It noted that a net weighted balance of 58 per cent of companies predicted that conditions for this half of the year will be worse than the previous six months.
The accommodation, food and beverage service and retail trade industries are most affected by the pandemic and, in turn, the most pessimistic about the months ahead.
Overall, firms in the service sector expect to hire fewer workers between last month and June than they did in the first three months of the year. And 27 per cent of firms expect employment to fall in this quarter, with just 3 per cent predicting an increase in hiring.
In addition, a net weighted balance of 53 per cent of companies expect operating receipts to decline for the three months to June 30.
Sentiment in manufacturing has turned negative compared with that in the previous quarterly survey which indicated that firms were expecting an improvement in business conditions.
The EDB poll noted that a net weighted balance of 56 per cent of companies anticipate a weaker business outlook from last month to September compared with the first three months of the year.
Firms across all clusters expect a softer operating environment for the six months to Sept 30, given weakened external demand and supply chain disruptions due to global containment measures.
The transport engineering cluster was the most pessimistic, with a net weighted balance of 79 per cent of firms expecting a weak time ahead.
Overall, a net weighted balance of 10 per cent of manufacturers plan to hire fewer workers in this quarter compared with the first three months.
Overall, manufacturing firms anticipate lower output in these three months, primarily due to global containment measures.
The Ministry of Trade and Industry said yesterday it is "not surprising that many businesses surveyed are pessimistic about their near-term outlook" given that global coronavirus containment measures have affected many firms. It pointed out that Singapore's economic fundamentals remain strong despite the challenges of the pandemic.