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SINGAPORE: The Economic Development Board (EDB) said business sentiment among manufacturers here has improved.
Data from its latest Business Expectations Survey showed a weighted 22 per cent of firms predict an improvement in the business conditions in the next six months compared with 16 per cent last quarter.
A weighted 13 per cent of companies foresee worse business conditions over the next six months, lower than 18 per cent a quarter ago. Meanwhile, a weighted 65 per cent expect the situation to remain the same.
Almost all clusters within the manufacturing sector expect an improved business environment as the global economy shows signs of recovery.
The electronics cluster is the most optimistic with a net weighted balance of 22 per cent of firms expecting business conditions to improve. This is followed by the general manufacturing industries with a net weighted balance of 20 per cent.
Business expectations for the precision engineering and chemical clusters have turned positive for the first time since the onset of the financial crisis last year.
However, the chemicals cluster is still concerned about excess supply of petrochemicals and petroleum refined products in the region.
EDB said the transport engineering cluster is the least upbeat about business conditions for the period October 2009 to March 2010, compared to a quarter ago.
Despite an improvement in business sentiments in the next six months, a net weighted three per cent of manufacturers expect output to decline in the fourth quarter of this year, compared to the third quarter.
The improved outlook has had a knock-on effect on recruitment. A weighted 92 per cent of manufacturers project a similar or higher level of employment in the fourth quarter. This compared to a weighted 87 per cent recorded in the survey conducted a quarter ago.
Meanwhile, business sentiment has also improved in the services sector. The Statistics Department said an overall weighted balance of 28 per cent of firms in the services sector forecast a favourable business outlook for the next six months.
This is higher than the 21 per cent of firms who recorded a positive outlook in the previous Business Expectations Survey a quarter ago.
In particular, hoteliers and firms in the catering industry were the most optimistic in the hope of better business in view of the year-end festive period and school holidays.
Department stores as well as retailers of clothing and footwear and jewellery and watches also foresee higher sales in anticipation of the festive shopping season in the coming months.
Banks & finance companies, brokerages, fund managers and insurance companies are also expecting higher levels of business activity during this period. However, firms in the real estate industry expect the demand for services to remain the same in the next six months. - 938LIVE/vm
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