Manufacturing and services firms expect steadier demand. AI-linked electronics and major events are still doing much of the support work.
Manufacturing stays in positive territory
The Economic Development Board surveyed 401 manufacturing firms. It found a net weighted balance of 12% for July to December 2026. That was down five percentage points from the previous survey, but it still points to a broadly constructive mood.
Manufacturers also expected a stronger near-term run. A net weighted balance of 26% forecast higher output in the third quarter. Meanwhile, 74% expected employment to stay broadly unchanged.
The brightest spots were in precision engineering and electronics. Firms in those clusters pointed to strong global investment in artificial intelligence and robust chip demand for AI applications. By contrast, the general manufacturing and chemicals clusters were less upbeat. They cited higher material, fuel and freight costs, plus pressure from Middle East feedstock disruptions.
Export sentiment remained guarded. Companies flagged overseas price competition, geopolitical developments and tariffs as the main obstacles to winning export orders.
Services benefit from events and AI demand
The services sector also improved. The Department of Statistics surveyed 1,600 companies. It found a net weighted balance of 13% for the July to December outlook. That reversed the prior reading of minus 4%.
Services firms also expected better operating revenue in the third quarter. A net weighted balance of 14% forecast growth. Employment sentiment remained positive too, at 10%.
Accommodation companies were among the most upbeat. They expect Formula 1, concerts and seasonal travel demand to lift visitor arrivals and hotel occupancy. Wholesale trade firms also looked stronger, helped by demand for AI-optimised servers, storage and networking equipment.
Other services segments had clear demand drivers. Administrative and support services expected more hiring for cleaning, landscaping and security work. Recreation, community and personal services cited new pre-school openings, stronger demand for AI-related training and steady healthcare needs.
What it means for investors
The Singapore outlook suggests a split but durable recovery pattern. AI-linked manufacturing and event-driven services are still carrying sentiment. Cost pressures and external uncertainty cap the pace of improvement.
For investors, the near-term watchpoints are clear. Semiconductor equipment, electronics supply chains, hospitality and service contractors may stay better supported than export-heavy and input-intensive segments. The next signals to watch are third-quarter output, hiring and visitor numbers.
