17% of manufacturers expect ‘deteriorating’ business till March 2012

It’s a grim outlook for the next six months -- but which sector is the most pessimistic?

According to a release, the electronics sector is the most pessimistic with 20% of firms expecting a less favorable business.

The Department of Statistics noted that business sentiment in the manufacturing sector is expected to soften in the next six months ending March 2012 as global demand weakens on the back of the Euro zone debt crisis and slower US economic growth. A weighted 7 per cent of manufacturers expect business conditions to improve while a weighted 17 per cent foresee deterioration. Overall, a net weighted balance of 10 per cent of manufacturers anticipate a less favourable business situation in the period October 2011 - March 2012, compared to the third quarter of 2011.

The softer business expectation is broad-based as all clusters in the manufacturing sector are more pessimistic in their outlook for the next six months. A net weighted balance of 2 per cent of firms in the transport engineering and general manufacturing industries predict deterioration.

Within the transport engineering cluster, the marine & offshore engineering segment anticipates orders to be secured at a slower pace amidst global economic uncertainties, while the aerospace and land segments maintain a positive outlook on the back of secured orders. In the general manufacturing cluster, the negative outlook is partially negated by the food, beverage and tobacco segment which expects an improved business situation in anticipation of the festive holidays in the next two quarters.

The electronics and precision engineering clusters are the least upbeat about business conditions in the next six months compared to the third quarter of 2011. A net weighted balance of 20 per cent of electronics firms project a less favourable business situation in view of the slowdown in global electronics demand. In the precision engineering cluster, a net weighted 19 per cent of manufacturers expect business conditions to soften in tandem with a weaker electronics outlook, specifically industries engaging in semiconductor-related equipment, bonding wire, rubber and plastic precision parts.