I	Business Sentiments for January – June 2012
1.	The manufacturing sector remains pessimistic about business prospects in the first half of 2012, amidst continuing global economic uncertainty. The latest survey shows a weighted 7 per cent of manufacturers expect business conditions to improve while a weighted 18 per cent foresee deterioration. Overall, a net weighted balance of 11 per cent of manufacturers anticipate a less favourable business situation in the January – June 2012 period, compared to the fourth quarter of 2011.
2.	All clusters in the manufacturing sector expect less favourable business conditions in the first six months of 2012, due mainly to uncertainties in Europe and the US. A net weighted balance of 2 per cent of firms in the biomedical manufacturing cluster expect deterioration, while a net weighted 3 per cent of the general manufacturing industries cluster anticipate weaker business conditions in the first half of 2012 compared to a quarter ago. In the chemicals cluster, a net weighted balance of 5 per cent of firms are less optimistic about the business situation in the first six months of 2012 compared to the previous quarter. Within the chemicals cluster, the petroleum segment foresees a weak business outlook due to high crude oil prices and poor refining margins while the rest expect business conditions to remain similar to a quarter ago.
3.	A net weighted 11 per cent of the transport engineering cluster foresee weaker business conditions in the next six months ending June 2012. This is mainly attributed to the marine & offshore engineering segment which expects a slowdown in orders on the back of the looming global economic uncertainties.
4.	The electronics and precision engineering clusters are the least upbeat about business conditions for the January – June 2012 period, compared to the fourth quarter of 2011. A net weighted balance of 22 per cent of electronics firms project a less favourable business situation, in view of weaker demand globally. In the precision engineering cluster, a net weighted 13 per cent of manufacturers expect business conditions to soften in tandem with the weaker electronics outlook.
II	Output Forecast for January – March 2012
5.	Compared to the fourth quarter of 2011, a net weighted balance of 7 per cent of manufacturers expect output to decrease in the first quarter of 2012.
6.	The chemicals cluster is the most optimistic with a net weighted balance of 13 per cent of firms anticipating higher output in the first quarter of 2012.  Within the cluster, the petroleum and other chemicals segments expect output to rise as their plants return to normal production following maintenance shutdowns in the preceding quarter.  The transport engineering cluster is the next most positive, with a net weighted balance of 4 per cent of firms predicting higher output. In particular, the aerospace and land segments expect a higher level of activity in the next three months. The biomedical manufacturing cluster also forecast higher output of active pharmaceutical ingredients in the next three months, compared to a quarter ago.
7.	The rest of the clusters forecast a lower level of production in the first quarter of 2012, compared to a quarter ago. This is largely due to softening external demand, arising from uncertainties over the Euro-zone debt crisis and the US economic situation.
III	Employment Forecast for January – March 2012
8.	Hiring expectations in the manufacturing sector remains weak for the first quarter of 2012,  compared to the previous quarter. A weighted balance of 9 per cent of manufacturers plan to hire workers while a weighted 11 per cent expect to reduce the number of workers employed. Overall, a net weighted 2 per cent of manufacturers foresee lower employment in the first quarter of 2012. Within the manufacturing sector, the transport engineering and general manufacturing industries clusters are the most optimistic about employment opportunities, while the electronics and precision engineering clusters expect to reduce employment headcount in the three months ahead.
IV	Factors Affecting Export Orders for January – March 2012
9.	A weighted 49 per cent of firms in the manufacturing sector reported no limiting factors that will affect their ability to obtain direct export orders in the first quarter of 2012. The weighted 42 per cent of firms that indicated export constraints cited price competition from overseas competitors, as well as economic and political conditions abroad as the most important limiting factors.
	Editors' Note:   For media enquiries, please contact  Ms Karen Lin  (Tel: 6832-6587 / hp: 9623-0355 / Email: karen_lin@edb.gov.sg). For further information on the business expectation results, please contact  Ms Leong Pui Ling  (Tel: 6832-6737 / hp: 9877-2580 / Email: puiling@edb.gov.sg). Updates on business expectations of the manufacturing sector for the first quarter of 2012 are available on http://www.news.gov.sg and http://www.sedb.com Technical Notes The Survey of Business Expectations of the Manufacturing Sector for the first quarter of 2012 was conducted between December 2011 and January 2012 by the Economic Development Board. Out of a total of 394 manufacturing establishments surveyed, 90 per cent responded. These establishments were asked to indicate their expectation of general business conditions and other indicators such as output and employment. Their views are expressed in terms of directional change (i.e. “up”, “same” or “down). Individual responses provided by the establishments are weighted by their contribution to employment and value added. These responses are then aggregated at cluster, sub-cluster and overall manufacturing level, and presented in terms of weighted percentages. The net weighted balance is commonly used to reflect the direction and extent of the business sentiments. It is the difference between the weighted percentage of 'up' responses and the weighted percentage of 'down' responses. For example, if weighted responses for overall manufacturing output yields a net weighted balance of +30 per cent, the plus sign before the percentage figure indicates a positive balance or net upward movement, and not a 30 per cent increase in output. Similarly, a minus sign before the percentage indicates a downward trend and not a decline by that amount. About the Singapore Economic Development Board The Singapore Economic Development Board (EDB) is the lead government agency for planning and executing strategies to enhance Singapore’s position as a global business centre.  EDB dreams, designs and delivers solutions that create value for investors and companies in Singapore.  Our mission is to create for Singapore, sustainable economic growth with vibrant business and good job opportunities. EDB’s ‘Host to Home’ strategy articulates how we are positioning Singapore for the future.  It is about extending Singapore's value proposition to businesses not just to help them improve their bottom line, but also to help them grow their top line through establishing and deepening strategic activities in Singapore to drive their business, innovation and talent objectives in Asia and globally.  For more information on how EDB can help your business, please visit www.sedb.com