Nearly 1 in 5 manufacturers wary over business deterioration in 1H13

One sub-sector keeps its optimism intact.

According to the latest survey released by the Economic Development Board, business outlook in the manufacturing sector is expected to remain weak in the first half of 2013 as slow global economic growth continues to weigh down on business sentiments in Singapore. 

The latest survey shows that a weighted 8 per cent of manufacturers expect business conditions to improve while a weighted 18 per cent foresee deterioration. Overall, a net weighted balance of 10 per cent of manufacturers anticipate a less favourable business situation in the period January – June 2013 as compared to the fourth quarter of 2012.

Within the manufacturing sector, a net weighted balance of 7 per cent of the biomedical manufacturers expect business situation to improve in the first half of 2013 compared to a quarter ago. This optimism is led by the pharmaceutical segment which foresees higher demand from overseas.

In the general manufacturing industries cluster, a net weighted balance of 1 per cent of firms project an improved business situation in the next six months. This positive sentiment stems mainly from the food, beverages & tobacco segment, which anticipates improved demand due in part to seasonal factors (e.g. Lunar New Year).

On the other hand, a net weighted balance of 8 per cent of chemical manufacturers is less upbeat in the first half of 2013 compared to the fourth quarter of 2012. This is largely due to the petroleum segment which expects refining margins to come under pressure with increased capacity from the start-up of new plants overseas.

Business outlook in the precision engineering cluster is also weak with a net weighted balance of 9 per cent of firms projecting a less favourable outlook, on the back of weak equipment spending and low demand for precision components. The electronics cluster is the least upbeat in the manufacturing sector.

A net weighted balance of 28 per cent of electronics firms expect weak demand conditions to persist in the six months ahead amidst slow economic growth in Europe and US.