Chart of the Day: Don’t count on a rebound for Singapore manufacturing in H2

O&G-related industries will likely stay weak.

Though analysts maintain a hazy outlook for Singapore manufacturing, predictions leave a lot to be desired.

According to a report by Maybank Kim Eng, the latest EDB Singapore business expectations poll for the period July-December 2016 netted a -1.0, revealing that the industry turned cautious on H2 outlook.

Upstream and downstream oil and gas-related industries are expected to remain soft in H2. Chemicals sector is hampered by weak expectations on Petroleum, Petrochemical, and Specialty Chemicals, while Transport Engineering continues to be dragged by Marine and Offshore. Electronics and Biomedical, the two main drivers of manufacturing sector growth in Q2, is anticipated to be hit by the flagging business conditions in H2.

Meanwhile, for Q3, Maybank Kim Eng predicted that employment condition in the manufacturing sector will likely remain weak for the fourth consecutive quarter. Output condition is expected to crumble, and new orders are expected to evaporate amid lower local sales coupled with subdued direct export overseas.

“The Ministry of Trade and Industry (MTI) cut the upper bound of the official 2016 growth forecast range to 1.0%-2.0% from 1.0%-3.0% previously. MTI cautioned that the manufacturing sector’s 2Q 2016 growth of +1.1% YoY (1Q 2016: -0.5% YoY) may not be sustained,” shared Maybank Kim Eng.

“The ‘negative’ start to 2H 2016 and the official’s and industry’s cautious outlook for the period are in line with our full-year real GDP growth forecast of +1.8% which signals slower growth in 2H 2016 after the +2.1% expansion in 1H 2016,” it added.