Recent findings from a survey conducted by the Singapore Economic Development Board (EDB) reveal that business sentiment among Singapore's manufacturers is cautiously optimistic, despite ongoing geopolitical and economic challenges. The survey covers the period from October 2023 to March 2024.
According to the EDB, 19% of manufacturers anticipate an improvement in business conditions over the next six months, while 12% expect a decline. This results in a net weighted 7% of manufacturers remaining positive compared to the third quarter of 2023.
Among the various sectors, the transport engineering industry stands out as the most optimistic. A net weighted 35% of companies within this sector foresee a favorable business environment for the October to March timeframe, compared to the previous quarter.
In the electronics sector, a net weighted 23% of companies are optimistic about future business conditions, largely due to anticipated adjustments in clients' inventories within the semiconductor segment. This is likely to contribute to a gradual rebound in demand.
Within general manufacturing, a net weighted 6% of companies expect improved business prospects.
However, there are some sectors that remain cautious. The precision-engineering industry, particularly the precision modules and components segment, continues to face challenges due to macroeconomic uncertainties and a global slowdown in electronics demand. A net weighted 5% of precision-engineering companies anticipate a weaker business environment.
Similarly, the chemicals sector expects a decline in business conditions, with a net weighted 13% of companies projecting worsening prospects in the coming months. In the biomedical manufacturing sector, a net weighted 13% of companies expect lackluster business conditions to persist until March 2024.
Overall, while there are concerns regarding weak demand and ongoing economic headwinds, Singapore's manufacturers remain hopeful and resilient. The positive sentiment displayed by key sectors indicates potential for growth and recovery in the upcoming months.