, Singapore

Manufacturing sector firms 'cautiously positive’ about business in 1H24

A net weighted balance of 10% expects an improved situation.

Firms in the manufacturing sector are “cautiously positive” about business in the first half of the year despite geopolitical and economic headwinds.

Recent data from EDB showed that a weighted 21% of manufacturers expect business conditions to improve in January-June, whilst a weighted 11% foresee a weaker business

Overall, a net weighted balance of 10% of manufacturing firms anticipates an improved business situation in 1H24, higher than the 7% record in 4Q23. 

Within the manufacturing industry, the electronics cluster stands out as the most optimistic, with 16% of firms anticipating a favourable business environment for the period between January to June.

This positive outlook stems from the semiconductors segment, which anticipates a gradual recovery in demand as inventory levels in the end markets normalise alongside robust demand for AI-related chips.

In the transport engineering cluster, there is a net weighted balance of 14% of companies that foresee improved business conditions from January to June. 

"This optimism is led by the marine & offshore engineering segment, which continues to see robust orders from the oil & gas and renewable energy industries. Firms in the aerospace segment also expect sustained demand for aircraft maintenance, repair and overhaul (MRO) activities on the back of strong global and regional air travel demand," EDB said.

Within the precision engineering cluster, a net weighted balance of 8% of companies predicts more promising business prospects for the next six months.

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