Singapore manufacturers cautious in H1
Saturday, 02 February 2008

HTML clipboard Agence France-Presse . Singapore

Singapore manufacturers have turned cautious about business prospects in the first half of this year, a government survey released Thursday said, while the world frets over a projected global economic slowdown.

Ten per cent of companies in the key manufacturing sector expect the general business situation to improve, while eight per cent predict a deterioration, the Economic Development Board said.

The responses are ‘weighted’ to account for the employment contribution and value added from individual businesses. This resulted in a net weighted balance of two per cent expecting the business environment to improve, a weakening of sentiment from the net balance of seven per cent in the same period a year earlier, EDB said in a statement.

Cautiousness prevailed across almost every manufacturing cluster, including electronics, chemicals, pharmaceuticals and precision engineering, it said.

But there was optimism among companies in transport engineering, which covers the manufacture of oil drilling rigs as well as ship conversion and repair.

Firms in this cluster expect a ‘sustained demand for shipyard and conversion services, and a strong backlog of orders for the next six months ending June 2008,’ EDB said. Singapore makes most of the world’s offshore oil drilling rigs.

Transport engineering companies also expect an increased demand for aerospace services as airlines send in their aircraft for maintenance after the peak travel season in December, EDB said.

A separate survey by Singapore’s statistics department said companies in the services sector were ‘generally optimistic about business conditions’ in the first six months, with hotels being the most optimistic.

Faced with a slowing US economy, a key market for Singapore exports, the city-state’s trade-reliant economy is expected to grow at a slower pace this year after expanding 7.5 per cent in 2007.

The International Monetary Fund on Tuesday lowered its 2008 global growth outlook, citing a US financial crisis that is putting emerging economies at risk.

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