Singapore firms in the manufacturing and service sectors expect business to improve as Covid-19 vaccination drives in multiple countries have raised global economic prospects.
Their more upbeat sentiments were captured in the latest quarterly surveys released separately by the Economic Development Board (EDB) and the Department of Statistics (SingStat) yesterday.
A net weighted balance of 38 per cent of manufacturing firms anticipate a favourable business situation from April to September, the EDB survey showed. This compares with 32 per cent of firms in the previous quarter's poll.
A weighted percentage refers to an aggregate of the responses of manufacturers based on their proportion of the manufacturing sector.
The electronics cluster was the most optimistic, with a net weighted balance of 66 per cent of firms having a positive business outlook. This sentiment was driven mainly by the semiconductor and other electronic components segments, which project higher export orders on account of robust demand from 5G markets, said EDB.
The service sector also grew more optimistic, with 20 per cent of firms upbeat about business conditions, while 9 per cent foresee slower business conditions. This means a net weighted balance of 11 per cent of firms expect a more favourable business outlook, an improvement on the 7 per cent seen in the previous survey by SingStat.
Within the service sector, the information and communications, finance and insurance, and wholesale trade industries are among those that expect business conditions to improve for the next six months. But the accommodation and retail trade industries expect weaker business conditions ahead.
On the accommodation front, hoteliers expect slow pickup in demand due to continued entry restrictions and border closures. In the retail trade industry, department stores and supermarkets are less optimistic in their business outlook.
Overall, the service sector expects an increase in hiring activity for the second quarter, with a net weighted balance of 6 per cent of firms indicating so.
The recreation, community and personal services industry, as well as the information and communications industry, expect an increase in employment in the three months until end-June. Conversely, firms in the accommodation industry expect a lower employment level in view of weak demand.
A majority of firms in the manufacturing sector - a weighted 77 per cent - expect the employment level in the second quarter to remain similar to the first quarter. A net weighted balance of 9 per cent of firms plan to hire more workers in the second quarter.
The biomedical manufacturing, electronics and precision engineering clusters were the most optimistic in their employment outlook.
