SINGAPORE – For the third straight quarter, Singapore manufacturers remain pessimistic about business in the next six months, while positive sentiment in the service sector has moderated, according to separate quarterly survey reports released on Tuesday.
A net weighted balance of 25 per cent of manufacturers expect a less favourable business situation from January to June 2023, worsening from the previous quarterly survey, where 20 per cent were pessimistic, according to the latest report from the Economic Development Board (EDB).
For service companies, a net weighted balance of 3 per cent of them are optimistic, down from 9 per cent previously, a similar survey by the Department of Statistics (SingStat) found.
The net weighted balance is the difference between the weighted shares of positive and negative responses, with a positive figure indicating more optimism than pessimism.
Among manufacturers, a weighted balance of 6 per cent of them expect improved conditions ahead, while 31 per cent expect conditions to worsen.
All but one manufacturing cluster are pessimistic about business conditions in the next six months, with electronics the most downbeat, followed by biomedical manufacturing, general manufacturing, precision engineering and chemicals. The current downcycle in the global semiconductor industry was cited as one reason for the pessimism in electronics, while the recent curbs on technology exports to China by the United States could weigh on orders for chipmaking equipment.
Bucking the trend, transport engineering has a net weighted balance of 21 per cent of manufacturers expecting the business outlook to improve in the next six months.
The aerospace segment (43 per cent), which expects higher demand for aircraft maintenance, repair and overhaul jobs as cross-border air travel continues to recover, leads the optimism, EDB said.
Similarly, the marine and offshore engineering segment (11 per cent) is positive in view of the continued pick-up in global oil and gas activities and more ship repair jobs as well as offshore conversion projects secured.
Manufacturers in the land segment (minus 22 per cent) are pessimistic, however.
In terms of hiring, the majority of companies expect employment levels in the first quarter of 2023 to remain similar to the fourth quarter of 2022, EDB said.
Overall, a net weighted balance of 3 per cent of manufacturers expect a decline in hiring activities for the first three months of the year, compared with the previous quarter. In particular, the electronics (minus 25 per cent) and precision engineering (minus 6 per cent) clusters are the least optimistic in their employment outlook.
In the service industry, 19 per cent of companies are upbeat about business conditions in the first half of 2023, while 16 per cent foresee deteriorating business conditions.
The most positive segments are accommodation, followed by professional services, then transport and storage together with recreation, community and personal services.
But companies in food and beverage services, wholesale trade, and information and communication expect business conditions to deteriorate.
Noting the positivity in the accommodation segment, SingStat said that hoteliers cited the upswing of international travel and increased tourist arrivals in Singapore as reasons for optimism.
With a net weighted balance of 3 per cent of companies, the service sector foresees higher revenue for the January to March period than from October to December 2022.
On employment, the majority of companies in the service sector see an increase in hiring.
“Hoteliers within the accommodation industry expect to increase headcounts to cope with higher business activity from tourist arrivals in the coming months,” SingStat said.
“In line with their positive revenue outlook, firms within the recreation, community and personal services industries also expect to increase hiring.” THE BUSINESS TIMES
