Manufacturing sector more optimistic than services, surveys find

Things are looking up in general for the manufacturing sector.
Things are looking up in general for the manufacturing sector.ST PHOTO: JOYCE FANG

Things are looking up in general for the manufacturing sector, but sentiments were more mixed for firms in the services sector, two separate surveys released yesterday showed.

A weighted 12 per cent of manufacturers expect business conditions to improve in the six months to September, while just 5 per cent expect them to weaken, a survey by the Singapore Economic Development Board found.

The optimism was widespread in the sector, with all clusters, except the general manufacturing industries, anticipating better business prospects compared to the previous quarter. The electronics and precision engineering clusters lead the optimism, with 16 per cent of firms in each cluster projecting favourable business conditions till September.

In the electronics cluster, the semiconductor firms anticipate strong demand for chips used in smartphones, and automotive and data storage applications. Additionally, the other electronic modules and components segment expects more orders from China, the United States and the European Union.

In precision engineering, the machinery and systems segment sees better business prospects, supported by the semiconductor-related equipment industry. Sentiment in the precision modules and components segment is expected to turn positive as incoming orders improve, particularly for optical instruments, metal stamping, bonding wire and dies, and moulds, jigs and fixtures.

However, for the services sector, the outlook was more mixed. Overall, more firms (14 per cent) were optimistic about business conditions for the next six months. compared with a quarter ago (10 per cent).

The Singapore Department of Statistics survey found that information and communications, and wholesale trade firms were more bullish; retail trade, food and beverage, and transport and storage services firms were less optimistic.

A version of this article appeared in the print edition of The Straits Times on April 29, 2017, with the headline 'Manufacturing sector more optimistic than services, surveys find'. Print Edition | Subscribe