Singapore Business Mood at 22-Month High

Business confidence in Singapore’s manufacturing sector remained firmly positive in the third quarter of 2026, with the net weighted balance climbing to 24% from 12% in the previous survey, as robust global demand for AI-related products continued to underpin sentiment despite elevated geopolitical and economic uncertainties. Electronics was the most optimistic segment, with its net weighted balance surging to 42% from 19% in Q2, supported by stronger sentiment across semiconductors (47% vs 29%), computer peripherals and data storage (49% vs -73%), and other electronic modules and components (35% vs -18%). Biomedical manufacturing also maintained a positive outlook, with the balance increasing to 14% from 3%, largely driven by medical technology (17% vs -1%). In contrast, precision engineering sentiment weakened, with the balance declining to 48% from 55%, reflecting softer confidence in machinery and systems (58% vs 62%) and precision modules and components (6% vs 28%).

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.