The business expectations of firms in both the manufacturing and services sectors turned positive after a year of gloom, with sentiments boosted by the start of Covid-19 vaccinations across countries.
Their sentiments were captured in the latest quarterly surveys, whose findings were released separately by the Economic Development Board (EDB) and Department of Statistics (SingStat) yesterday.
A weighted 36 per cent of manufacturers expect better business conditions for the first six months of this year, while a weighted 4 per cent expect things to worsen, the EDB survey showed. Thus, an overall net weighted balance of 32 per cent of manufacturers were upbeat on their business outlook.
This was the first overall positive outlook for the sector since April.
A weighted percentage refers to an aggregate of the responses of manufacturers based on the proportion of output and value they add to the manufacturing sector.
The service sector also turned optimistic after being downbeat for more than a year.
Some 21 per cent of firms were optimistic about business conditions while 14 per cent were pessimistic, resulting in a net weighted balance of 7 per cent having a positive business outlook for the first six months, the SingStat survey showed.
This was the first positive net weighted balance for the service sector after four quarters of negative sentiments.
Within the service sector, several industries expect business conditions to improve in the first half of this year, compared with July to December last year.
These are the finance and insurance; recreation; community and personal services; food and beverage services; retail trade; and information and communications industries.
But industries such as accommodation and real estate continue to be less optimistic due to global travel restrictions and work-from-home arrangements.
All manufacturing clusters anticipate better business prospects in the first half of this year. The biomedical manufacturing cluster is the most optimistic, with a net weighted balance of 46 per cent of firms expecting a favourable operating environment.
Within the cluster, the pharmaceuticals segment expects improved market conditions such as fewer supply chain disruptions.
Similarly, the medical technology segment expects more orders for both Covid-19 and non-Covid-19-related medical devices in the near term.
The service sector expects hiring for the first quarter of this year to remain at a similar level compared with the fourth quarter of last year.
The information and communication services industry is expected to recruit more in the first quarter.
In particular, firms in computer programming activities might hire more due to increased demand for their services.
In contrast, firms in the accommodation industry expect lower employment in the first quarter due to weaker demand.
Meanwhile, the bulk of manufacturing firms – making up a weighted 86 per cent – expect employment in the first quarter to remain similar to that for the fourth quarter of last year.
Overall, a net weighted balance of 4 per cent of manufacturers plan to recruit more workers in the next three months.