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Singapore manufacturers are less positive about business prospects for the next six months, reflecting concerns about inflation and global economic growth, a government survey showed on Thursday.
Overall, a net weighted 2 percent of manufacturers said they expect business conditions to improve in January to June, the state’s Economic Development Board said in a statement, sharply below the 25 percent in the previous survey issued in October.
“The manufacturing sector is cautious about business prospects in the first half of 2008,” the trade agency said in its quarterly survey of business expectations in the manufacturing sector.
Growth in most Asian economies is likely to slow this year, dragged by a weaker U.S. economy which is the region’s top export market. “Across the region we are seeing more caution. Expectations have shifted to neutral from optimistic,” said Ho Woei Chen, an economist at United Overseas Bank. “If U.S. demand slows, it will affect all export markets.”
The survey showed that a net weighted balance of only 1.0 percent of electronics manufacturers expect business to improve in the six-month period, a sharp deterioration from the 33 percent in the previous survey.
Manufacturers expect the demand for electronic goods to drop after the year-end holiday season amid rising competition in the sector, the agency said.
Singapore’s export-driven economy unexpectedly shrank for the first time since 2003 in the fourth quarter as manufacturing weakened on slowing economic growth in the United States, the city-state’s top export market by country, preliminary estimates from the government showed.