Business confidence among Singapore manufacturers continues to weaken

Ronnie Springwell

SINGAPORE – Business confidence remains subdued in the first half of 2023 as demand for manufactured goods from Singapore manufacturers weakens amid ongoing supply chain challenges and cost pressures, the Economic Development Board said on Tuesday.

Compared with the fourth quarter of 2022, a net-weighted 25% of manufacturers expect less favorable business conditions in the first half of the year, the EDB said. A weighted 31% of manufacturers expect a weaker business outlook, while a weighted 6% expect business conditions to improve, the EDB added.

In general manufacturing, a net-weighted 25% of firms expect a weaker business outlook until June, the EDB said. Within the sector, companies in the food, beverage, tobacco and miscellaneous industries are concerned about rising operating costs and expect macro weakness to weigh on export demand.

The EDB said 44 percent of net-weight companies in the electronics and precision engineering industries and 13 percent expected the weak business environment to continue into the first half of the year. A net-weighted 27 percent of companies in biopharmaceutical manufacturing expect business conditions to be less favorable, while a net-weighted 5 percent in chemicals expect business conditions to worsen.

Among manufacturing, the transport engineering sector is the most optimistic, with a net-weighted 21 percent of firms expecting an improvement in business conditions, the EDB said. The optimism is led by the aerospace sector, which expects demand for aircraft maintenance, repair and overhaul work to increase as cross-border air travel continues to recover.

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