Business sentiments in the manufacturing and services sectors remain positive amid the Covid-19 situation, according to data released by the Singapore Economic Development Board (EDB) and the Department of Statistics (SingStat) on Oct 29.
For the manufacturing sector, the findings come from EDB’s Survey of Business Expectations of the Manufacturing Sector for the 4Q2021 which was conducted between September and October. 413 manufacturing establishments were surveyed with a response rate of 91%.
A weighted 22% of manufacturers anticipate better business conditions over the next six months ending March 2022, while a weighted 6% foresee a weaker business outlook. Overall, a net weighted balance of 16% of manufacturing firms anticipate a favourable business situation for the next six months, compared to the 3Q2021.
Within the manufacturing sector, the electronics cluster is the most optimistic, with a net weighted balance of 27% of firms expecting a better business situation in the period from October until March next year, compared to the 3Q2021.
This optimism is largely led by the semiconductors segment which continues to expect robust demand from the 5G market, cloud services and data centres.
Overall, a net weighted balance of 7% of manufacturers expect output to increase in the 4Q2021 compared to the previous quarter. All clusters project higher levels of production in the next three months.
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A majority of firms in the manufacturing sector expect the employment level in the 4Q2021 to remain similar to the previous quarter. Overall, a net weighted balance of 11% of manufacturers project a larger workforce in the next three months. In particular, the biomedical manufacturing and electronics clusters are the most optimistic in their employment outlook.
A weighted 73% of firms in the manufacturing sector reported no limiting factors that would affect their ability to obtain export orders in the fourth quarter of 2021. Among the firms that anticipate challenges in obtaining export orders, the top two limiting factors cited are the Covid-19 pandemic and price competition from overseas competitors.
Meanwhile, results from the quarterly survey done by SingStat have also found that business expectations for the next six months among firms in the services sector continue to improve.
The 4Q2021 survey was conducted on some 1,500 enterprises between September to October.
25% of firms are upbeat while 6% of firms foresee deteriorating business conditions, resulting in a net weighted balance of 19% of firms expecting a more favourable business outlook for the six-month period ending March 2022. This is an improvement over the net weighted balance of +11% recorded in the previous period.
Within the services sector, all industries expect business conditions to improve for the six months ending March 2022 when compared with Apr to Sep.
In particular, firms in the transportation & storage industry expect business conditions to improve as Singapore extends Vaccinated Travel Lanes (VTL) to more countries. The finance & insurance industry also foresees the business situation to improve for the next six months, in anticipation of an improvement in the global economic conditions.
The services sector, with a net weighted balance of 16% of firms, foresees higher revenue for the 4Q2021 compared with 3Q2021. Firms in the transportation & storage industry expect higher revenue for the next three months. Similarly, firms in the retail trade and food & beverage services industries expect operating receipts to increase in the 4Q2021 which coincides with the year-end festive period.
In terms of employment, the services sector expects an increase in hiring activity for the 4Q2021, with a net weighted balance of 10%. In line with their positive business outlook, the retail trade and food & beverage industries expect to increase hiring for the next 3 months. Similarly, the accommodation industry expects higher employment levels. Hoteliers expect to hire more workers to support the increased demand with VTLs to more countries and the year-end school holidays.
Photo: Bloomberg
