Singapore manufacturers worried by U.S. economy, electronics demand
Singapore manufacturers worried by U.S. economy, electronics demand
Agence France-Presse, Singapore
Singapore's manufacturers have become gloomier about business prospects for the rest of the year due to uncertainties about the U.S. economy and softer than expected electronics demand, an official survey showed Thursday.
"Manufacturers are less upbeat about the business situation in the second half of 2002 compared to a quarter ago," the Economic Development Board (EDB) said in a summary of a survey of some 400 companies conducted in June and July.
Just 25 percent of the industrialists polled expected an improvement in the business climate, compared to 39 percent a quarter ago. Those expecting business conditions to worsen escalated to 15 percent, from seven percent.
The EDB said the crucial electronics industry was less optimistic despite an upswing in manufacturing activities in recent months, expecting global electronics demand to recover at a slower pace than earlier expected.
Businesses and consumers overseas remain cautious in information technology spending, an EDB statement said.
Sentiment was also down among chemicals firms, including petroleum refining and petrochemicals, but in the biomedical sciences industry, the economy's brightest area, most companies expected robust business conditions to continue into the second period.
Nevertheless, 73 percent of the respondents planned to invest in plants and machinery in the next 12 months.
The survey also showed price competition from foreign competitors remained "the most important factor limiting industrialists' ability to obtain more export orders" in the third quarter this year.
"Economic uncertainties especially in the U.S. would continue to affect export orders in the third quarter of 2002," it said, adding this sentiment was especially significant for the electronics sector.
Singapore has rebounded from its worst recession since the 1960s but businessmen and consumers remain wary.
Last month, the Monetary Authority of Singapore said gross domestic product for the full year is likely to grow at the upper end of the official forecast range of between 2.0-4.0 percent.
Advance estimates released last month showed GDP grew a better-than-expected 3.2 percent in the June quarter, driven by the non-electronics sector, following a 1.5 percent contraction in the first quarter.
Singapore's export-dependent economy contracted 2.0 percent last year after posting 10 percent growth in 2000.