SINGAPORE: Manufacturers in Singapore are optimistic about business conditions in the next six months.

This, according to EDB's Survey of Business Expectations of the Manufacturing Sector for the fourth quarter of 2003.

EDB says the improved positive outlook is encouraged by the recovery in the US economy and higher demand for electronics products.

And compared to the third quarter of 2003, companies foresee a higher level of manufacturing activities in the final quarter of 2003.

The survey was conducted between September and October 2003. Out of a total of about 400 manufacturing establishments surveyed, 93 per cent responded. These establishments were asked to indicate their experience and expectation of business conditions, investment trends and other indicators such as output, employment, orders and sales.

Overall, a weighted 30 per cent of the manufacturers expect an improved business situation while a weighted 8 per cent foresee a deterioration, giving a net weighted balance of 22 per cent who predict a turnaround in business conditions in the six months ahead, compared to the third quarter of 2003.

On the whole, a net weighted balance of 25 per cent of the industrialists forecast higher output, 15 per cent anticipate more orders and 19 per cent expect increased exports.

More electronics firms expect an improved business outlook in the coming six months compared to a quarter ago. This positive outlook was boosted by increasing market demand for electronics products such as semiconductor devices, hard disk drives and mobile phones.

In the chemicals cluster, the petroleum refining segment anticipates higher demand for heating products with the onset of northern winter. A majority of

the firms engaged in the manufacturing of petrochemicals, industrial gases, water & waste treatment chemicals and mineral oil additives foresee similar

business conditions in the six months ahead, compared to the third quarter of 2003.

In the biomedicals cluster, a weighted 92 per cent of the firms predict a stable business situation in the next two quarters, compared to the third quarter of 2003 and in the precision engineering cluster, the machinery & systems segment expects higher orders for semiconductor equipment in the next six months as capital spending by semiconductor firms begin to increase.

The only exception to this positive outlook is in the transport engineering cluster.

Within that cluster, business sentiments in the aerospace segment remains weak in the next six months due to fewer orders for commercial aircraft repairs.

A majority of the marine & offshore engineering firms expect similar business situation as the third quarter of 2003.

In a separate survey by Singstat, firms in the commerce and services sector were also optimistic the business climate will improve from now to March next year.

A net 23 percent in the commerce sector predicted businesses will improve further and a net 32 percent of their counterparts in the services sector felt

likewise.

In another sign the island is recovering from the SARS-induced slump that brought the lucrative tourism trade to a virtual standstill, a net 96 percent of hoteliers polled were confident the recent surge in inbound tourists would continue in the months ahead.

Preliminary government estimates showed Singapore's GDP grew 15 percent in the September quarter after an 11 percent decline in the second quarter, its fastest pace since 1997, confirming the export-dependent economy has overcome the worst of the SARS-induced slump. - CNA