Business sentiments in the manufacturing sector remain subdued amidst the continued spread of the COVID-19 pandemic, as well as uncertainty in global trade and macro conditions. According to the Singapore Economic Development Board, a weighted 24 per cent of manufacturers anticipate business conditions to improve, while a weighted 31 per cent foresee a softer business outlook.
Overall, a net weighted balance of 7 per cent of manufacturers predict a less favorable business situation for the period July to December 2020, compared to the second quarter of 2020.
Within the manufacturing sector, a net weighted balance of 3 per cent of firms in the precision engineering cluster expect an improved operating environment in the second half of 2020. The cautious optimism is largely due to the precision modules & components segment, which expect a gradual resumption of activities following the domestic circuit breaker as well as lockdowns in major overseas markets in the second quarter of 2020.
By contrast, the machinery & systems segment is less optimistic about the next six months, in view of the weak global macro conditions resulting from COVID-19 and uncertainties over US-China relations.
In the electronics cluster, a net weighted balance of 1 per cent of firms anticipate an improved business outlook in the six months ahead. Within the cluster, the semiconductors segment foresees resilient demand from the 5G market, cloud storage and data centers.
However, the infocomms & consumer electronics and other electronic modules & components segments expect orders to be negatively impacted by COVID-19 and US-China tensions.
A net weighted balance of 22 per cent of the biomedical manufacturing cluster predict a weak business situation in the six months ending December 2020. The softer outlook is mainly in the pharmaceuticals segment where there are some concerns over potential delays in the supply chain.
However, the medical technology segment is more optimistic about the operating environment ahead, given that its export markets are gradually re-opening following the lockdowns in the second quarter of 2020.
The transport engineering cluster is the most pessimistic, with a net weighted balance of 43 per cent of firms expecting the operating environment to remain weak in the second half of 2020.
In the marine & offshore engineering segment, oil & gas-field equipment manufacturers anticipate fewer orders amidst the low oil price environment, while the shipyards continue to expect lackluster demand for oil-rigs.
In the aerospace segment, firms expect demand for aircraft engine repair to be adversely affected by the grounding of commercial aircraft due to the ongoing travel restrictions in most countries.
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