Singapore's business expectations remain similar in H1 2017
A weighted 13 percent of manufacturers expects business conditions to improve while a weighted 11 percent foresees deterioration.
Overall, a net weighted balance of 2 percent of manufacturers anticipates a favorable business situation for the period, compared to the fourth quarter of 2016.
The electronics cluster is the most optimistic within the manufacturing sector. This optimism is largely led by the semiconductors segment, which expects the current improved market conditions to continue into 2017, according to the survey.
A net weighted balance of 2 per cent of firms under the precision engineering cluster also anticipates business conditions to improve in the six months ahead as the machinery and systems segment foresees better business prospects, largely supported by the semiconductor-related equipment industry.
In contrary, the transport engineering cluster, chemical cluster and general manufacturing sector predict a less favorable business situation in the first half of 2017.
The weaker outlook in the transport engineering cluster is largely driven by the marine and offshore engineering segment, which continues to be weighed down by lackluster offshore exploration and drilling activities.
Within the chemical cluster, the petroleum refining segment is concerned about the strength of refining margins following a seasonal uptick in the fourth quarter of 2016, while majority of the petrochemicals and specialties firms expect similar business conditions as a quarter ago.
Weak sentiment prevails in all segments of the general manufacturing industries cluster, especially firms in the miscellaneous industries segment, which expect lower demand for construction related materials due to the slowdown in construction activities.
In term of output production, a net weighted balance of 4 percent of manufacturers expects output to decrease in the first quarter of 2017, compared to the fourth quarter of 2016. All clusters forecast a lower level of production except for the electronics and precision engineering clusters.
As to the labor market, a net weighted balance of 16 percent of manufacturers foresees lower employment in the first quarter of 2017. The transport engineering, general manufacturing industries and precision engineering clusters expect to hire fewer workers from January to March.
The survey of business expectations of the manufacturing sector for the first quarter of 2017 was conducted between December 2016 and January 2017 by the EDB. Out of a total of 432 manufacturing establishments surveyed, 96 percent responded. ■