Singapore Business Confidence Improves in Q3

Business confidence in Singapore’s manufacturing sector stayed positive in the first quarter of 2026, with a net weighted balance rising to 17 from 11 in the previous quarter, despite ongoing geopolitical and economic uncertainty. This marked the highest reading since Q2 2024, led by precision engineering (+51) and the electronics cluster (+42), supported by strong global AI-related investment and demand. Transport engineering (+8) also maintained a modestly positive outlook, due to continued strength in aerospace maintenance. In contrast, the chemicals sector (-53) remained the weakest, weighed by supply disruptions, higher feedstock costs, and margin pressures linked to Middle East tensions, while general manufacturing industries (-13) turned more cautious amid rising input costs. Looking ahead, a net 20% of firms expect higher output in Q2 2026, led by electronics, precision engineering, and transport engineering, while most companies anticipate stable employment levels.

Business confidence in Singapore’s manufacturing sector rose to 11 in the fourth quarter of 2025 from 8 in the previous quarter. This marked the highest reading of the year, signaling growing optimism, with the electronics sector (+33) remaining the main driver, buoyed by sustained AI-related demand in the semiconductors segment. Transport engineering (+10) also maintained a positive outlook, supported by strong demand for aerospace maintenance, while biomedical manufacturing (+8) turned modestly optimistic on expectations of higher pharmaceutical exports. In contrast, chemicals (-17) recorded the weakest sentiment amid concerns over macroeconomic uncertainty, weak refining margins and oversupply. Looking ahead, output expectations for Q1 2026 were marginally positive (+6) with most clusters anticipating higher production, while employment levels are expected to remain broadly stable, with the majority of firms planning no significant changes to workforce size.

Business confidence in Singapore’s manufacturing sector rose to 8 in the third quarter of 2025, reflecting a cautious but notable upturn after a reading of 5 in the previous quarter. The electronics sector (+30) was the main driver, buoyed by sustained AI-related demand in the semiconductors segment. The biomedical sector (+11) also turned positive, supported by higher expected orders for pharmaceuticals products. Similarly, transport engineering (+13) remained optimistic, led by strong demand in aerospace maintenance, repair, and overhaul activities. In contrast, precision engineering (-35) posted the weakest outlook as firms reported delayed customer orders amid global uncertainty, while chemicals (-4) stayed subdued due to weak demand and maintenance shutdowns. Meanwhile, output expectations for Q4 turned positive (+7), with most clusters anticipating higher production, though employment levels are expected to stay broadly stable.