Manufacturers slightly more optimistic for first half of 2017 but services sector more gloomy

Slightly more local firms in the manufacturing sector are expecting things to improve but companies in the services line are more gloomy.
Slightly more local firms in the manufacturing sector are expecting things to improve but companies in the services line are more gloomy. PHOTO: ST FILE

SINGAPORE - Slightly more local firms in the manufacturing sector are expecting things to improve but companies in the services line are more gloomy, going by separate surveys released on Tuesday (Jan 31).

Seventy-six per cent of firms in the manufacturing sector expect business in the first half of 2017 to remain the same as the fourth quarter of last year, 13 per cent see improvement while 11 per cent foresee business slowing, a survey by the Economic Development Board (EDB) found.

Overall, a net weighted balance of 2 per cent of manufacturers anticipate business to improve. The net weighted balance is the difference between the proportion of optimistic and pessimistic firms.

The outlook has deteriorated for Singapore's services sector. A net weighted balance of 14 per cent of firms expect business to slow down in the first six months of this year from the previous half-year, according to a quarterly survey by the Department of Statistics Singapore (Singstat). This is worse than the 8 per cent who felt this way three months ago, though better than the 18 per cent who thought so a year ago.

Only 10 per cent of services firms expect business to improve, while 24 per cent see conditions worsening. The majority - 66 per cent - see business staying the same.

Within the services sector, transport and storage firms were among the most pessimistic, with 43 per cent expecting business to worsen. In particular, shipping lines foresee a slower global economy and weaker consumer demand continuing to hit cargo volume in the first half of this year, said Singstat.

For the manufacturing sector, electronics firms are the most optimistic, with a net weighted balance of 26 per cent anticipating business to improve. This optimism is largely led by the semiconductors segment, which expects the current improved market conditions to continue into 2017. In contrast, firms dealing with infocomms and consumer electronics expect business to deteriorate, compared to the previous quarter.