Singapore's manufacturing to remain weak in 1st half of 2016:Survey

Business outlook in the manufacturing sector in Singapore is expected to be weak in the first half of 2016, on the back of global economic uncertainties, the ongoing slowdown in China and a low oil price environment, according to a survey by Singapore Economic Development Board (EDB) on Friday.

The survey of business expectations of the manufacturing sector for the first quarter of 2016 was conducted between December 2015 and January 2016 by the EDB. Out of a total of 430 manufacturing establishments surveyed, 96 percent responded.

A weighted 7 percent of manufacturers expects business conditions to improve while a weighted 29 percent foresees deterioration. Overall, a net weighted balance of 22 percent of manufacturers anticipates a less favourable business situation for the period, compared to the fourth quarter of 2015.

The weak business sentiment is broad-based, with almost all clusters foreseeing a decline in business situation in the next six months ending June. The exception is the biomedical manufacturing cluster, where a net weighted balance of 17 percent of firms anticipates a positive business outlook ahead.

Both the pharmaceuticals and medical technology segments are optimistic, as there are plans to introduce new products in the former and strong export demand in the latter, according to the survey.

A net weighted balance of 31 percent of manufacturers expects output to decrease in the first quarter of 2016, compared to the fourth quarter of 2015.

All clusters forecast a lower level of production in the seasonally less active first quarter of 2016. Other factors such as lackluster global economic conditions, slowing growth in China and sustained low oil prices will continue to weigh on production, said EDB.

As to the labour market, hiring expectations in the manufacturing sector are expected to be weak in the first quarter, compared to the fourth quarter of 2015. A weighted 5 percent of manufacturers plan to hire more workers while a weighted 11 percent expects to reduce the number of workers employed.

Overall, a net weighted balance of 6 percent of manufacturers foresees lower employment in the first quarter of 2016. All except the biomedical manufacturing cluster expect to hire fewer workers from January to March.