PUBLISHED ONNovember 02, 2026 9:08 AMBYSean LerManufacturing firms in Singapore remain optimistic about the next six months despite geopolitical developments continuing to cloud the global economic outlook.
This was revealed in an Economic Development Board (EDB) survey on Monday (Nov 2) involving 397 manufacturing firms, conducted between September and October.
They were asked to indicate their expectation of general business conditions and other indicators such as output and employment for the period between October this year and March 2027.
According to the Business Expectations of Manufacturing Sector survey, a weighted 29 per cent of manufacturers expected business conditions to improve from the third quarter, while 5 per cent foresee weaker conditions.
Among them, precision engineering companies, led by semiconductor-related equipment firms, are the most upbeat, expecting global artificial intelligence (AI)-related investment to continue expanding.
This was followed by firms in the electronics cluster, driven by robust orders secured for semiconductors used in AI applications.
Both these sectors similarly led the chart during the last round of survey conducted between June and July.
The chemicals sector remained the most pessimistic, with firms in the petroleum segment remaining concerned about persistent uncertainty in crude oil feedstock supply from the Middle East.
Meanwhile, transport engineering firms, while with a net weighted positive sentiment, expect headwinds to their business outlook owing to rising costs in areas such as materials, fuel and freight.
Overseas competition was also cited as a reason.
A net weighted balance of 34 per cent of manufacturers are expecting their output to increase in Q4 2026, up from the 26 per cent forecast for the third quarter.
Among manufacturing businesses, all sectors — except for transport engineering businesses — are expecting their production to increase.
In particular, the electronics cluster, the semiconductors and computers peripherals and data storage segments expect higher production of semiconductors and data storage products, to cater to buoyant demand from AI data centres.
The transport engineering cluster's sentiment returns are premised on expectations of lower production of oil and gas-field equipment owing to geopolitical uncertainties weighing on clients' orders.
A net weighted balance of 72 per cent of firms in the manufacturing sector expect employment levels in the fourth quarter to remain broadly similar as the last quarter.
Only the biomedical manufacturing and transport engineering sectors are projecting drops in employment levels.
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