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Singapore's electronics makers still optimistic despite signs of slowdown

Posted: 04 Aug 2006 ?? ?Print Version ?Bookmark and Share

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Electronics manufacturers in Singapore see their businesses expanding in the coming months despite some indications the sector may be headed for a slowdown, according to a report released recently by the city-state's Economic Development Board (EDB).

The EDB survey on business expectations in the manufacturing sector, which covered nearly 400 firms, found 45 percent of producers in the electronics cluster expect their circumstances to improve in the second half of the year, compared with only 26 percent of manufacturers overall.

In addition, 30 percent of the electronics firms surveyed said they planned to hire new staff over the next two months, up from only 7 percent last quarter.

The mood of optimism was most pronounced in the computer peripherals market, where around 80 percent of companies polled expect revenues, output, and staff numbers to grow in the short term.

Sentiments were grimmer in the semiconductor industry, where just 10 percent of firms surveyed expect output to rise in the third quarter and only 35 percent see business conditions improving in late 2006.

The agency said the survey results showed orders were holding steady at many companies in anticipation of demand surges heading to the holiday season.

The generally positive views are also in line with the government's forecasts for production in the third quarter, which is tipped to rise on the back of export growth.

And these views persist despite an uncertain macroeconomic environment and recent signs trouble may lie ahead for the local electronics industry, including dips in the benchmark Purchasing Managers' Index and a June report from the Ministry of Trade and Industry that predicted a sharp drop in growth from last year for the manufacturing sector.

The EDB survey also indicated local manufacturers may be feeling squeezed by producers in lower-cost destinations like China. Nearly half of those polled said there were outside factors affecting their ability to garner more export orders, and "price competition from overseas" was cited as the most important of these.

- Jonathan Hopfner
EE Times




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