Singapore Business Mood Remains Positive

Business confidence in Singapore's manufacturing sector remained positive in the second quarter of 2026, with a net weighted balance of 12%, though down from 17% in the previous survey, as strong global AI-related demand continued to support sentiment despite elevated geopolitical and economic uncertainty. Precision engineering (+55) was the most optimistic, driven by semiconductor-related equipment demand, while electronics (+19) also stayed upbeat on robust AI-related semiconductor demand. In contrast, chemicals (-25) remained the weakest amid Middle East-related feedstock supply disruptions, while general manufacturing industries (-13) stayed cautious due to rising material, fuel, and freight costs. Looking ahead, a net 26% of firms expect output to increase in the third quarter, led by precision engineering, electronics, and transport engineering, while most manufacturers anticipate stable employment.

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.