Singapore Manufacturers Expect Favorable Business Situation in 1H 2022 - MarketWatch

By Ronnie Harui

SINGAPORE--Business sentiment in Singapore's manufacturing sector remains positive for the first half of 2022 despite uncertainties caused by Covid-19 variants and pressures on supply chains, the Singapore Economic Development Board said Monday.

Overall, a net weighted 8% of manufacturers anticipate a favorable business situation for the January-June period, compared with the fourth quarter of 2021, the EDB said. A weighted 15% of manufacturers expect better business conditions, while a weighted 7% foresee a weaker business outlook.

The transport engineering cluster is the most optimistic, with a net weighted 54% of companies anticipating an improved operating environment for the six months ending June, the EDB said. Within this cluster, the aerospace segment continues to expect higher demand for aircraft maintenance, repair and overhaul work with more countries easing international travel restrictions.

A net weighted 16% of companies in the biomedical manufacturing cluster expect a positive business outlook in the first half of 2022, the EDB said. This positive sentiment is mainly driven by the medical-technology segment, where companies project continually strong export demand for both Covid-19- and non-Covid-19-related medical devices.

In the precision-engineering cluster, a net weighted 11% of companies predict favorable business conditions to improve in the period, the EDB said. The semiconductor-equipment industry in the machinery-and-systems segment leads the optimism, as strong world-wide chip demand continues to drive capital investments among global semiconductor manufacturers.

On the other hand, the electronics cluster is the least upbeat, with a net weighted 4% of companies projecting a less favorable business situation for the January-June period, compared with the fourth quarter of 2021, the EDB said. Within this cluster, the semiconductors segment foresees demand remaining strong, although seasonally lower than that in the preceding quarter.

Meanwhile, a weighted 68% of manufacturers expect the employment level in the first quarter of 2022 to remain similar to that of the previous quarter. Overall, a net weighted 12% of manufacturers expect to increase hiring in the period, the EDB said.

Write to Ronnie Harui at ronnie.harui@wsj.com

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