Local manufacturers less optimistic on business prospects for 2H14: EDB survey

Only 6% of manufacturers expect a favourable business situation.

The country’s manufacturers are relatively downbeat on their business situation for the second half of 2014, according to a report by the Economic Development Board.

The EDB’s Business Expectations of the Manufacturing Sector report for July-December 2014 show that a weighted 9 per cent of manufacturers expect business conditions to improve while a weighted 3 per cent foresees a deterioration.

This shows a decline when compared with the EDB’s report for April to September, wherein a weighted 12 per cent of manufacturers expected business conditions to improve while a weighted 5 per cent foresaw deterioration.

Overall, this results in a net weighted balance of 6 per cent of manufacturers expecting a favourable business situation for the period July – December 2014, compared to 7 per cent from April to September.

Here’s more from the EDB:

Compared to the second quarter of 2014, a net weighted balance of 3 per cent of the manufacturers expects production to increase in the third quarter of 2014. All except the biomedical manufacturing cluster expect a higher level of output in the next three months.

Within the manufacturing sector, the general manufacturing industries cluster is the most bullish with a net weighted balance of 21 per cent of firms projecting a higher level of production in the third quarter of 2014 compared to the preceding quarter.

In particular, the food, beverage & tobacco segment projects a higher output level, in anticipation of the festive holidays (e.g. Hari Raya and Mid-Autumn Festival). The printing and miscellaneous industries segments project higher output of commercial printing and construction-related materials, respectively.

The transport engineering cluster is the next most upbeat about its production activities in the next three months. The marine & offshore segment expects a sustained level of marine activity and higher production of oil and gas-field equipment in the September quarter. The aerospace and land segments also foresee higher output with secured orders on hand.

In contrast, the biomedical manufacturing cluster is the least upbeat, with a net weighted balance of 11 per cent of firms projecting lower production in the third quarter of 2014, as compared to a quarter ago. While the medical technology projects a higher level of production to meet export demand, the pharmaceutical segment plans to produce a lower volume of active pharmaceutical ingredients in the next three months.