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Singapore Q4 business sentiment worsens for services and manufacturing
GLOBAL trade tensions and property cooling measures in Singapore have taken their toll on fourth-quarter business sentiment in the manufacturing and services sectors, according to separate updates from the Economic Development Board (EDB) and the Department of Statistics (SingStat) on Wednesday.
A net weighted balance of 3 per cent of services sector firms expects the business situation to improve between October 2018 and March 2019, compared with the previous six months – easing from a net weighted balance of 9 per cent in both the third quarter and the year-ago period.
The mood has turned even gloomier in the manufacturing sector, as a majority of companies expect the next six months to worsen – reversing the positive trend in recent surveys.
A net weighted balance of 1 per cent of manufacturers pointed to a softer business outlook – a turnaround from the net weighted balance of 7 per cent that saw brighter prospects in the third quarter.
The net weighted balance is the difference between the proportion of optimistic and pessimistic firms polled by the two agencies.
The EDB singled out two kinds of manufacturers as markedly gloomy: The machinery and systems segment in the precision engineering cluster and the infocomms and consumer electronics segment in the electronic cluster both anticipate weaker orders, amid growing concerns over global trade tensions, it said.
But the transport engineering cluster stood out for being the most optimistic, with a net weighted balance of 21 per cent of firms expecting the situation to pick up compared with the previous quarter.
Oil and gas equipment makers are crossing their fingers for more orders as oil prices improve, while shipyards and aerospace companies both predict more repair work in the next six months.
Also bucking the doomsday trend was the biomedical manufacturing cluster: A net weighted balance of 6 per cent of firms in this cluster reported good cheer, as export orders are expected to stay strong in the medical technology segment.
Meanwhile, a weighted 70 per cent of manufacturers have reported no constraints on their ability to obtain export orders in the last quarter of 2018.
But a weighted 25 per cent have still named price competition from overseas rivals, as well as economic and political conditions abroad, as the top two limiting factors on export orders, said the EDB.
Separately, all industries within the services sector believe that business conditions will either improve or stay the same in the next six months – with the exception of the real estate industry.
The property sector saw a negative net weighted balance of 18 per cent, in the wake of the overnight market cooling measures unveiled by the authorities in July.
“Real estate developers continue to expect the government property cooling measures, including the additional buyer’s stamp duty and loan-to-value limits, to have a negative impact on the property market,” SingStat noted.
Otherwise, companies in the food and beverage services, retail trade, and accommodation industries all expect better business prospects in the six months to March 31, 2019, lifted by the year-end holidays and festivities such as Christmas and Chinese New Year.
Food and beverage services led the pack, with a net weighted balance of 36 per cent, followed by retail trade, at 29 per cent, and accommodation, at 17 per cent.
Computer programming and consultancy firms, as well as Web portal service providers, are also looking forward to higher demand for their services, driving the information and communications industry to a net weighted balance of 13 per cent.
So are firms in the recreation, community and personal services industry – especially healthcare providers – with a net weighted balance of 5 per cent.
Source: https://www.businesstimes.com.sg/government-economy/singapore-q4-business-sentiment-worsens-for-services-and-manufacturing