Business sentiment for the rest of the year has fallen sharply among manufacturers here on the back of global trade tensions, according to a survey released yesterday.

It found that 22 per cent of manufacturers expect a softer outlook over the next six months, while only 11 per cent anticipate conditions to improve. That equates to a net weighted balance of 11 per cent of manufacturers expecting a gloomier second half of the year.

This is a stark turnaround from the same period last year when a balance of 7 per cent expected an improved business outlook.

Biomedical manufacturing is the most optimistic sector, supported by the pharmaceuticals segment, which anticipates higher export demand for biological products.

In contrast, the chemicals and electronics and precision engineering clusters are less optimistic about the second half, an Economic Development Board quarterly survey found.

Chemicals firms are concerned about declining refining margins and weaker demand from the region, particularly China. Companies in the electronics and precision engineering cluster cite subdued demand for semiconductors and related equipment and uncertainties arising from the trade conflict.

A separate Department of Statistics survey on the service sector, also out yesterday, found that expectations have moderated for this half. It noted that 12 per cent of firms foresee slower business, while 14 per cent are optimistic, resulting in a net weighted balance of 2 per cent predicting a more favourable outlook.

This is well down on the 9 per cent positive outlook recorded for the same period last year.

The retail trade, wholesale trade and financial and insurance industries are the least optimistic.