Manufacturers slightly upbeat, service firms downcast
Manufacturers are slightly more upbeat about business prospects for this half of the year but service firms are gloomier, according to two separate surveys out yesterday.
An Economic Development Board poll found that a net weighted balance of 2 per cent of manufacturers expect more favourable conditions over the January to June period, compared with the fourth quarter of 2016.
The net weighted balance is the difference between the percentage of firms that expect improvement and those that expect conditions to worsen. Individual responses are weighted by their contribution to employment and value added.
There was a 96 per cent response rate from the 432 manufacturers surveyed. Most of those polled (a weighted 76 per cent) expect conditions in this half of 2017 to remain similar to the preceding quarter.
The electronics cluster is the most optimistic within the manufacturing sector, with a net weighted balance of 26 per cent of firms anticipating better business conditions.
This optimism is driven largely by the semiconductors segment, which expects improved market conditions to continue into the year.
Meanwhile, the Department of Statistics survey of the service sector found a net weighted balance of 14 per cent of firms expect less favourable business conditions in this half compared with the second half of last year.
This is less optimistic than the net weighted balance of 8 per cent of firms expecting less favourable business conditions registered in the previous quarter's survey.
About 1,500 services firms across various sectors were polled.
Within services, firms in the accommodation and food and beverage service industries were among the most downbeat and expect slower business in this period, following the year-end holidays.
Transport and storage industry companies are also pessimistic.
A net weighted balance of 43 per cent fear business will worsen. Shipping lines expect the slower global economy and weaker consumer demand will hit cargo volumes.
Real estate firms were also downbeat, blaming cooling measures and the economic uncertainty for weak demand.