Singapore manufacturing sector upbeat about 2014

SINGAPORE – The in Singapore is generally optimistic about business prospects in the Year of the Horse, according to the latest Survey of Business Expectations of the Manufacturing Sector conducted by the Economic Development Board (EDB).

Some 400 manufacturing establishments responded to the EDB survey between December 2013 and January 2014. These establishments were asked to indicate their expectation of general business conditions and other indicators such as output and employment, including their business sentiments for H1 2014 and business forecasts for Q1 2014.

Business sentiments for January- June 2014

The manufacturing sector expects a positive business situation in the first half of 2014 on the back of improved global macroeconomic conditions. Overall, a weighted 11% of manufacturers expect business conditions to improve while a weighted 7% foresees deterioration. This results in a net weighted balance of 4% of manufacturers expecting a more favourable business situation in the next six months ending June 2014 as compared with the fourth quarter of 2013.

Within the manufacturing sector, all except the electronics cluster project better business conditions for the period January – June 2014. The biomedical manufacturing cluster is the most optimistic with a net weighted balance of 19% of firms expecting an improved business situation. The pharmaceutical segment anticipates higher orders from the US and Europe while the medical technology segment plans to launch new medical devices in the months ahead.

The precision engineering cluster is the next most optimistic with a net weighted balance of 8% of firms anticipating better business prospects in the first half of 2014. The machinery and systems segment which includes industries such as semiconductor related equipment and metal forming machinery and tools, foresees business to pick-up with improved economic conditions in the US and Europe.

On the other hand, the electronics cluster is the least upbeat about business conditions in the first half of 2014 compared to a quarter ago. Overall, a net weighted balance of 5% of electronics firms project a less favourable business situation. This weak sentiment is led by the infocomms dns consumer electronics and data storage segments, as demand for personal computers and disk drives remain lackluster.

Forecasts for January-March 2014

Output Compared to the fourth quarter of 2013, a net weighted balance of 9% of manufacturers expects output to increase in the first quarter of 2014. All except the electronics and chemicals clusters foresee higher output in the next three months.

The biomedical manufacturing cluster is the most upbeat, with a net weighted balance of 73% of firms projecting a higher level of production in the first quarter of 2014 as compared to a quarter ago. Both the pharmaceutical and medical technology segments expect higher output level in the next three months in anticipation of strong demand from overseas, as well as increased capacities.

In contrast, the electronics and chemicals cluster project lower output in the first quarter of 2014 compared to a quarter ago. Firms in the electronics cluster generally anticipate weaker export demand in the seasonally less active first quarter of the year. Output in the chemical cluster is mainly weighed down by lower petroleum throughput, on account of weak refining margins and scheduled plant maintenance shutdowns.

Employment In terms of employment forecast, a weighted 94% of firms in the manufacturing sector expect employment level in the firstAir Jordan XVIII 18