Service firms most optimistic in 3 years

This article is more than 12 months old

Two quarterly surveys, one on service sector and one on manufacturing, released

The service sector is more upbeat about prospects for the next six months than it was three months ago, but manufacturers are expecting it to be business as usual.

These are the findings from two separate quarterly surveys out yesterday.

A Department of Statistics poll of 1,500 service firms found that they are at their most optimistic in over three years.

A net weighted balance of 9 per cent of companies expect more favourable business conditions from now till March - up from 5 per cent in the previous quarter's survey, when sentiments turned positive for the first time in seven quarters.

All industries in the service sector were feeling optimistic, with one exception - real estate firms, especially those involved in leasing commercial space.

But the year-end holiday period has raised hopes of more business, particularly for companies in the food and beverage, retail and accommodation lines, the report said.

In a separate poll of manufacturers by the Economic Development Board (EDB), a weighted 14 per cent of factory bosses said they expect business conditions to improve over the next six months, compared with 12 per cent in July.

A weighted 9 per cent of factory bosses think business will deteriorate.

In July, 8 per cent predicted a slump.

The survey of 429 manufacturers elicited a response from 95 per cent.

These individual responses were then weighted by their contribution to employment and value-added, said the EDB.

It noted that 77 per cent expect business in the next six months to continue at the same pace seen in the third quarter.

The precision engineering cluster is the most optimistic, with a net weighted balance of 22 per cent of companies anticipating improved business conditions.

The EDB said: "This optimism is led by the machinery and systems segment, which foresees higher demand for semiconductor-related equipment, as well as measuring devices supporting the wireless communications and automotive industries...

"On the other hand, a majority of firms (a weighted 74 per cent) in the precision modules and components segment expect little change in business conditions in the next six months."

The electronics cluster is the least optimistic, with a net weighted balance of 11 per cent of firms expecting operating conditions to worsen.

On the employment outlook, a net weighted balance of 11 per cent of manufacturers plan to hire fewer workers this quarter, as compared with the last quarter.

Except for the chemicals and biomedical clusters, all other manufacturing clusters expect to hire fewer workers in this period.