A net weighted balance of 14% of manufacturers anticipates a less favorable business situation for the period January – June 2019, compared to the fourth quarter of 2018, the Economic Development Board (EDB) announced today.
Breaking the statistics down, a weighted 5% of manufacturers expect business conditions to improve while a weighted 19% foresees a weaker business outlook,
Most manufacturers expect business conditions in these six months to remain similar to those of the fourth quarter of 2018, with a weighted 76% holding this view. However, only a weighted 5% expect conditions to improve, while a weighted 19% sees them weakening.
Within the manufacturing sector, the biomedical manufacturing and the transport engineering clusters expect a positive business outlook in the first half of 2019.
In the biomedical manufacturing cluster, a net weighted balance of 6% of firms foresees a favorable operating environment in the next six months. This positive sentiment is largely due to the medical technology segment which expects export orders to remain strong.
In the transport engineering cluster, a net weighted balance of 4% of firms expects an improvement in business conditions in January – June 2019 period, compared to a quarter ago. This is mainly led by the marine & offshore engineering segment which anticipates a continual modest uptick in demand for oil & gas-field equipment and ship repairing activities in the first half of 2019. However, offshore rig orders remain subdued.
On the other hand, the rest of the manufacturing clusters are less optimistic about business prospects in the first half of 2019, compared to a quarter ago. In particular, the electronics and precision engineering clusters foresee weaker orders, amid softening demand for semiconductors and semiconductor-related equipment as well as growing concerns over global trade tensions.
Compared to the fourth quarter of 2018, a net weighted balance of 2% of manufacturers
expects output to decrease in the first quarter of 2019. Within the manufacturing sector, the biomedical manufacturing cluster is the most optimistic, with a net weighted balance of 35% of firms projecting a higher level of production in the first quarter of 2019, compared to a quarter ago.
The pharmaceuticals segment forecasts higher production of active pharmaceutical ingredients while the medical technology segment projects increased output to meet export demand for medical devices in the next three months.