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.