Manufacturing outlook muted

Manufacturers in Singapore are cautious about business prospects in the first half of 2008, although most clusters expect output to rise in the first quarter of the year.

According to a study by the Economic Development Board (EDB), a weighted 10% of manufacturers expect business to improve, while eight percent predict deterioration. There are common concerns over rising cost pressures and uncertainty in global economic conditions for first half of the year, but a net weighted balance of 14% of manufacturers expect production to increase in the first quarter of 2008, over the last quarter of 2007.

A net weighted balance of 1% of electronics manufacturers are expecting an improvement in business conditions in the first half of 2008, as compared to the last quarter of 2007. Generally, a net weighted balance of 5% of electronics manufacturers expect production to increase in the first quarter of the year.

In the chemicals cluster, the majority of firms expect business conditions to remain mostly unchanged for the first half of 2008, compared with the previous quarter. Business conditions in the biomedical manufacturing cluster are also expected to remain the same in the next six months ending June 2008.

On the other hand, a net weighted balance of eight percent of the precision engineering cluster expects the business environment to worsen in the first half of the year.

The transport engineering cluster continues to be optimistic for the next six months ending June 2008. In the marine & offshore engineering and aerospace segments, there is an expected increase in output in first quarter of the year, compared with a quarter ago.

A weighted 53% of firms in the manufacturing sector reported no limiting factors affecting their ability to obtain more export orders in the third quarter of 2007. Price competition from overseas competitors is cited by manufacturers as the most important limiting factor that affects their ability to obtain more export orders.