77% of Singapore manufacturers expect stable business prospects in H1 2015

THE majority of Singapore manufacturers - a weighted 77 per cent - expect the business situation to remain stable in the first half of 2015, while a weighted 13 per cent foresee slower business, going by results from the latest Survey of Business Expectations of the Manufacturing Sector conducted by the Economic Development Board (EDB).

The survey, released on Friday, also found that a weighted 10 per cent of manufacturers expect better business prospects during January to June 2015.

Within the manufacturing sector, all except the electronics and transport engineering clusters expect better business prospects during the period. The chemicals cluster is the most optimistic with a net weighted balance of 12 per cent of firms expecting improved business conditions in the next six months. In particular, the petroleum and petrochemical segments expect a lower operating cost environment, on account of declining crude oil and feedstock prices, said EDB.

On the other hand, EDB said that the transport engineering cluster is showing less optimism in the first half of 2015 compared to a quarter ago. In particular, the marine and offshore engineering segment expects orders to decline in the months ahead, as global oil and drilling firms cut back on capital expenditure in view of falling oil prices.

In terms of output, a net weighted balance of 7 per cent of manufacturers expects output to decline in the first quarter of 2015, compared to the fourth quarter of 2014.

Within the manufacturing sector, the chemicals cluster is the most optimistic with a net weighted balance of 36 per cent of firms projecting a higher production level in the first quarter of 2015 compared with the preceding quarter. This is mainly led by the petroleum segment which expects resumption of production following a series of maintenance shutdowns in the fourth quarter of 2014, said EDB.

Overall, the report showed that a net weighted balance of 2 per cent of manufacturers plan to hire fewer workers in the first quarter of 2015 compared to the fourth quarter of 2014. All except the biomedical manufacturing and transport engineering clusters expect to hire fewer workers during the period.