SINGAPORE, April 30 (Xinhua) -- Singapore manufacturers are optimistic about business conditions over the next six months, buoyed by a strong global semiconductor upcycle, while services firms expect a softer outlook amid persistent inflation and geopolitical uncertainties, official surveys showed on Thursday.
A net weighted balance of 17 percent of manufacturing companies anticipates better business conditions between April and September, the Singapore Economic Development Board said in a survey report. Precision engineering and electronics firms lead the optimism with net positive of 51 percent and 42 percent, respectively, driven by robust global investments in artificial intelligence and semiconductor equipment.
The transport engineering cluster also expects a positive outlook, driven by sustained aerospace demand for maintenance and repair services despite elevated fuel costs.
However, the biomedical manufacturing cluster, general manufacturing industries cluster and chemicals cluster are anticipating deterioration in the business environment over the next six months.
Overall, manufacturers forecast higher factory output in the second quarter, with a net weighted balance of 20 percent sees increase in output.
The chemicals cluster is the most dismal segment, with a net 53 percent of firms projecting a deteriorating environment. Petrochemical and petroleum companies expect feedstock supply disruptions from the Middle East to result in higher costs and weaker margins. A net 46 percent of chemical firms expect lower production for the quarter.
In the manufacturing sector, 78 percent of firms expect employment levels to remain similar in the second quarter, with all clusters except chemicals and biomedical planning to hire more workers.
Meanwhile, 66 percent of manufacturers plan to invest in plant and machinery over the next 12 months, primarily to replace older equipment and about 25 percent of industrial firms anticipate challenges in securing export orders due to overseas price competition and tariff threats due to global economic uncertainty.
In a separate statement, the Department of Statistics Singapore said the services sector expects a less favorable environment, recording a net weighted balance of negative 4 percent for the same six-month period.
The food and beverage and retail industries are the most pessimistic, recording net balances of negative 40 percent and negative 31 percent, respectively, weighed by fewer festive events, and the ongoing Middle East tensions may dampen tourism and consumer spending. ■
