More Manufacturing And Services Firms See Clouds Looming
SINGAPORE – Amid continuing global economic uncertainty, Singapore’s services and manufacturing sectors have reported pessimistic business outlooks for the first half of the year.
More firms in the services sector are expecting business conditions to worsen from now to June, with a net-weighted 25 per cent of firms expecting conditions to deteriorate. This compared to the 9 per cent recorded for October last year to March in the previous quarter’s survey, according to results released by the Department of Statistics (DOS) yesterday.
Separately, manufacturers remain negative about business prospects, with a net 11 per cent of manufacturers expecting a less-favourable business situation for the same period, according to a survey released by the Economic Development Board (EDB) yesterday.
With the services sector, most pessimistic was the real estate industry, with a net 60 per cent of the firms less upbeat about business conditions for the first half of the year.
In particular, “real estate developers express concern over the implementation of additional property cooling measures”, said the DOS, which surveyed 1,500 enterprises from December last year to the middle of last month.
Property and construction firm BBR Holdings, for example, is now struggling with sales of its luxury apartments at Nassim Hill after the cooling measures – which include an additional stamp duty for foreigners and companies – were introduced, said chief executive officer Andrew Tan in an interview with Reuters.
SIAS Research’s lead analyst Ng Kian Teck told Reuters: “Across the board, sales have been declining, especially in the high-end side, where there is more pressure.”
Most optimistic was the recreation, community and personal services industry, with a net 9 per cent of firms projecting business to improve in the coming months.
Meanwhile, all clusters in the manufacturing sector expect less favourable business conditions in the first six months of the year, due mainly to uncertainties in Europe and the United States, said the EDB. It surveyed 394 manufacturing establishments from December last year to last month, of which 90 per cent responded.
Least upbeat was the electronics and precision engineering clusters in view of weaker global demand – a net 22 per cent of electronics firms expected the situation to deteriorate, while 13 per cent of precision engineering manufacturers expect the same.
Going forward, a net 15 per cent of firms in the services sector predict lower operating receipts for the first quarter of the year, while a net 7 per cent of manufacturers expect output to decrease.
Hiring expectations for the services sector is expected to remain relatively stable from now to March, with the majority of firms (a weighted 84 per cent) expecting the same level of employment. In the manufacturing sector, hiring will remain weak, with a net weighted 2 per cent of manufacturers foreseeing lower employment.
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