MORE firms in the services and manufacturing sectors are upbeat about business prospects for the next six months, with sentiment for both industries improving from the previous quarter, two surveys show.
The surveys on firms' business expectations for April to September 2018 were released separately on Monday. The Economic Development Board (EDB) shared its findings on the manufacturing sector, while the Department of Statistics (DOS) reported on services.
The manufacturing sector showed more optimism, with a net weighted balance of 13 per cent of firms forecasting more favourable business conditions for the six months to September this year, versus a net weighted balance of only one per cent in the previous quarter's survey.
The net weighted balance is the difference between the proportion of optimistic and pessimistic firms.
Within the manufacturing sector, all clusters expect better business prospects in the next six months ending September 2018, as compared to the first quarter this year. About four in five Singapore manufacturers also expect their business situation to be stable.
The precision engineering cluster is the most optimistic, with a net weighted balance of 39 per cent of firms anticipating improved business conditions for the April to September period. This positive sentiment is largely led by the machinery & systems segment, which foresees continued strong demand for semiconductor-related equipment, EDB said.
In the electronics cluster, a net weighted balance of 14 per cent of firms expect a favourable operating environment to prevail in the next six months, while a net weighted balance of 10 per cent of the biomedical firms anticipate improving conditions ahead.
Similarly in the transport engineering cluster, a net weighted balance of 9 per cent of firms expect a positive business outlook. Within the cluster, the aerospace segment foresees more aircraft engine repair orders, while the marine & offshore engineering segment anticipates marginal improvement in the business environment, amidst a modest pick-up in crude oil prices, EDB said.
However, the EDB survey also found that a net weighted balance of 4 per cent of manufacturers plan to hire fewer workers in the second quarter this year, as compared to Q1 2018. The weak employment outlook came largely from the transport engineering cluster.
As for the services sector, a net weighted balance of 8 per cent of firms expect more favourable business conditions for the next six months, compared with October last year to March 2018. This is an improvement from the net weighted balance of 3 per cent recorded in the previous quarter's survey.
A weighted 17 per cent of firms are optimistic about the business climate for the next six months, while a weighted 9 per cent of firms anticipate slower business. Almost three in four firms expect the level of business activity to remain the same.
Within the services sector, the financial & insurance, wholesale trade, and real estate industries are among those that envisage more favourable business conditions.
On the other hand, firms in the retail trade, accommodation, and food & beverage services industries expect business prospects to deteriorate over the April-September period, compared to the previous six months, which coincided with the year-end holiday and the festive period.
Adapted from The Business Times, May 1st 2018.