Singapore manufacturers foresee no change in market conditions for 1H17

The majority of the firms polled (a weighted 76%) in the manufacturing sector by the Singapore Economic Development Board expect the business situation in 1H17 to remain similar to a quarter ago. A weighted 13% of manufacturers expect business conditions to improve while a weighted 11% foresee a slower business outlook. Overall, a net weighted balance* of 2% of manufacturers anticipate a favourable business situation for January to June 2017, compared to in Q416.

Within the manufacturing sector, the electronics cluster is the most optimistic about the next six months ending June 2017. A net weighted balance of 26% of firms anticipate an improved business situation ahead. This optimism is largely from the semiconductor segment, which expects the current improved market conditions to continue into 2017. In contrast, the infocomms & consumer electronics segment expects the business outlook to deteriorate compared to the preceding quarter.

In the precision engineering cluster, a net weighted balance of 2% of firms anticipate that business conditions will improve in the six months ahead, compared to Q416. Within this cluster, the machinery & systems segment foresees better business prospects, largely supported by the semiconductor-related equipment industry. On the other hand, the precision modules & components segment projects a less favourable business situation, in particular for metal stamping, plastic and rubber components.

A net weighted balance of 4% of manufacturers expect a lower level of output in Q117 compared to Q416. While the electronics and precision engineering clusters forecast output increases, the rest of the clusters project declines:

• A net weighted balance of 18% of firms in the electronic cluster expect production to increase in Q117 as compared with a quarter ago. 
• The semiconductor and other electronic modules & components segments expect higher output from January to March 2017 in anticipation of higher export orders and increased production capacities. 
• In the precision engineering cluster, a net weighted balance of 10% of firms project higher output, largely supported by the semiconductor-related equipment industry.

*A net weighted balance is used to indicate the likely overall direction of change of a particular activity or industry. Net weighted balance is calculated by taking the difference between the weighted percentages of  “ups” and “downs”. A minus sign denotes a net downward trend.