Singapore manufacturers’ business expectations improve moderately

A net 5 percent of manufacturers in Singapore expect business conditions to improve for the six months ending March 2018, up from 4 percent one quarter ago and on a year-on-year basis. Precision engineering was the most optimistic, along with chemicals, biomedical manufacturing and transport engineering. However, the outperformer for the year-to-date electronics cluster became distinctly less optimistic in view of an expected seasonal slowdown, particularly for infocomms & consumer electronics and other electronics modules & components.

Underneath the modest rebound in the headline net weighted balance data, the manufacturing engine is easing. The employment situation for manufacturers also stayed in the doldrums for the fourth quarter of this year, which is worse than the -5 percent seen in the earlier two quarters and also a year ago, noted OCBC Bank in a research report.

However, the sentiment in service sector has surged, improving for the third straight quarter to a net 9 percent anticipating more favorable business conditions for the next six months ending March 2018. With the widening growth base, all services industries other than the real estate segment tip a more upbeat outlook going ahead.

The F&B services were the most upbeat, rising 34 percent, along with finance & insurance and retail trade, which recorded a rise of 20 percent and 19 percent, respectively. On the contrary commercial leasing firms anticipate weaker demand. In terms of hiring intentions, a net weighted 7 percent of service firms plan to increase employment in the fourth quarter of 2017, led mainly by the accommodation and retail trade, stated OCBC Bank.

“The broadening growth base should provide greater resilience to S’pore’s growth outlook in 2018 as the services sector potentially picks up speed, even it is not ready to take over the driver’s seat just yet. Our forecast is for 2018 GDP growth to be around the 2-4 percent range with more even sectorial growth prospects”, added OCBC Bank.

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest