More firms expect business conditions for next 6 months to improve

This article is more than 12 months old

More companies expect business conditions for the next six months to improve.

But sentiment for both services and manufacturing sectors has dipped since the previous quarter.

The results came from two separate surveys released yesterday on companies' business expectations for January to June, conducted over December last year and January.

The Economic Development Board reported on the manufacturing sector, while the Department of Statistics reported on services.

While the dip in manufacturing sentiment was expected, the drop in services sentiment was a surprise to economists, some told The Straits Times.

Credit Suisse economist Michael Wan said: "For manufacturing, it makes sense as it is coming off strong growth rates last year.

"But it seems a bit odd for services, as there should be more spillovers to domestic-oriented services."

Services was marginally more optimistic, with a net weighted balance of 3 per cent of companies that expect more favourable conditions.

The net weighted balance is the difference between the proportion of optimistic and pessimistic companies.

However, the latest figure is lower than the 9 per cent net weighted balance in the previous quarter's survey.

A weighted 15 per cent of companies in the services sector are optimistic about the business conditions in the next six months, while a weighted 12 per cent foresee slower business.

As for manufacturing, a net weighted balance of only 1 per cent of companies expect an improved business situation for the first half of 2018, down from the 5 per cent in the previous quarter.

A weighted 13 per cent of manufacturers expect business conditions to improve while a weighted 12 per cent foresee the opposite.