SINGAPORE: Business sentiments in Singapore's manufacturing sector are expected to remain weak in the first half of this year, as slow global economic growth continues.
According to the latest survey by the Economic Development Board, a net weighted balance of 10 per cent of manufacturers anticipate a less favourable business situation in the period January to June this year, compared to the fourth quarter of 2012.
Within the manufacturing sector, EDB said the biomedical cluster is the most optimistic, with a net weighted balance of 7 per cent of firms anticipating better business prospects in the months ahead. Part of this optimism stems from the pharmaceutical segment which is foreseeing higher demand from overseas.
In the general manufacturing industries cluster, a net weighted balance of just one per cent of businesses project an improved performance in the first half of the year. This is due mainly to the food, beverages and tobacco segment, which is anticipating stronger demand due to seasonal factors such as the Lunar New Year.
On the other hand, the electronics cluster is the least upbeat about business prospects in the next two quarters. A net weighted balance of 28 per cent of electronics firms expect weak demand conditions to persist amid slow economic growth in Europe and US.
The precision engineering segment is also projecting a less favourable outlook on the back of weak equipment spending and low demand for precision components.
Meanwhile, business outlook for the chemical cluster is also weak. This is largely due to the petroleum segment, which is expecting refining margins to come under pressure with increased capacity from new plants overseas.
EDB said a net weighted balance of 10 per cent of manufacturers expect output to decline in the first quarter this year.
It added that employment prospects in the manufacturing sector in the first quarter of 2013 are likely to remain similar to the fourth quarter of 2012.
In particular, the transport engineering and general manufacturing industries clusters are most optimistic about employment opportunities between January and March 2013.
A weighted 45 per cent of the manufacturers said there are no limiting factors which could affect their ability to obtain direct export orders in the first quarter.
The weighted 48 per cent of firms that indicated export constraints cited price competition from overseas competitors, and economic and political conditions abroad as the most important limiting factors.
- CNA/al
Manufacturing business sentiments expected to remain weak: EDB
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Manufacturing business sentiments expected to remain weak: EDB
