According to the Singapore Economic Development Board (EDB) <a href="https://www.theedgesingapore.com/tags/business-sentiments"  target="_blank">business sentiments</a> in the manufacturing sector remain positive amid the Covid-19 environment and pressure on supply chains.

The findings come from EDB’s Survey of Business Expectations of the Manufacturing Sector for the 3Q2021, which was conducted between June and July. 415 manufacturing establishments were surveyed with a response rate of 92%.

According to the survey, a weighted 26% of manufacturers anticipate better business conditions while a weighted 6% foresee a weaker business outlook. Overall, a net weighted balance of 20% of manufacturing firms anticipate a favourable business situation for the period between July to December, compared to the 2Q2021.

Within the manufacturing sector, the electronics cluster is the most optimistic, with a net weighted balance of 40% of firms anticipating an improved business situation in the 2H2021. This is largely attributed to the semiconductors and other electronic modules & component segments which expect demand from the 5G market, cloud services and data centres to remain robust.

A net weighted balance of 21% of firms in the transport engineering cluster project a positive business environment for the July to December period. Firms in the aerospace segment expect business conditions to improve, in anticipation of the gradual resumption of regional and domestic flights, as more countries step up their vaccination programmes. The land segment also foresees stronger demand for automotive parts as the global automotive industry continues to recover.

In the precision engineering cluster, a net weighted balance of 15% of firms predict a favourable business situation in the six months ahead, driven by optimism relating to the semiconductor industry.

<i><strong>See also: <a href="https://www.theedgesingapore.com/news/singapore-economy/services-sector-firms-upbeat-business-outlook-next-six-months-singstat"  target="_blank">Services sector firms upbeat on business outlook for next six months: SingStat</a></strong></i>

A net weighted balance of 11% of firms in the biomedical manufacturing cluster anticipate better business prospects for the 2H2021. This positive outlook is mainly led by the medical technology segment which continues to project higher export demand for medical devices.

In contrast, a net weighted balance of 24% of firms in the chemicals cluster are the least optimistic, expecting a less favourable business situation until December. Within the cluster, firms in the petrochemicals segment are concerned that product prices and margins will be adversely impacted with new capacities coming on-stream in the region.

In terms of output forecasts, 71% of manufacturing firms expect the output level in the 3Q2021 to remain similar to the 2Q. Overall, a net weighted balance of 9% of manufacturers expect output to increase in the 3Q. from a quarter ago. All clusters project higher output levels in the next three months except the chemicals and general manufacturing clusters.

In terms of employment forecasts, 74% of firms surveyed expect the employment level in the 3Q2021 to remain similar to the 2Q. Overall, a net weighted balance of 8% of manufacturers project an increase in the workforce in the next three months. In particular, the electronics and biomedical manufacturing clusters are the most optimistic in their employment outlook.

72% of firms surveyed reported no limiting factors that would affect their ability to obtain export orders in the 3Q2021. Among the firms that anticipate challenges in obtaining export orders, the top two limiting factors cited are the Covid pandemic and price competition from overseas competitors.

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2H21 business sentiments for manufacturing sector 'remain positive' amid Covid-19 environment: EDB

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