I	Business Sentiment for October 2011 – March 2012
1.	Business sentiment in the manufacturing sector is expected to soften in the next six months ending March 2012 as global demand weakens on the back of the Euro zone debt crisis and slower US economic growth.  A weighted 7 per cent of manufacturers expect business conditions to improve while a weighted 17 per cent foresee deterioration. Overall, a net weighted balance of 10 per cent of manufacturers anticipate a less favourable business situation in the period October 2011 - March 2012, compared to the third quarter of 2011.
2.	The softer business expectation is broad-based as all clusters in the manufacturing sector are more pessimistic in their outlook for the next six months. A net weighted balance of 2 per cent of firms in the transport engineering and general manufacturing industries predict deterioration. Within the transport engineering cluster, the marine & offshore engineering segment anticipates orders to be secured at a slower pace amidst global economic uncertainties, while the aerospace and land segments maintain a positive outlook on the back of secured orders. In the general manufacturing cluster, the negative outlook is partially negated by the food, beverage and tobacco segment which expects an improved business situation in anticipation of the festive holidays in the next two quarters.
3.	The electronics and precision engineering clusters are the least upbeat about business conditions in the next six months compared to the third quarter of 2011. A net weighted balance of 20 per cent of electronics firms project a less favourable business situation in view of the slowdown in global electronics demand.  In the precision engineering cluster, a net weighted 19 per cent of manufacturers expect business conditions to soften in tandem with a weaker electronics outlook, specifically industries engaging in semiconductor-related equipment, bonding wire, rubber and plastic precision parts.
II	Output Forecast for October – December 2011
4.	Compared to the third quarter of 2011, a net weighted balance of 16 per cent of manufacturers expect output to decrease in the fourth quarter of 2011.
5.	The transport engineering cluster is the most optimistic with a net weighted balance of 12 per cent of firms anticipating higher output in the fourth quarter of 2011. Both the marine & offshore engineering and aerospace segments project a higher level of work done on secured contracts, while the land transport segment predicts an increased production to meet overseas delivery.
6.	On the other hand, the rest of the clusters forecast a lower level of production in the fourth quarter of 2011 compared to a quarter ago. The weaker production outlook is largely attributed to the softening of external demand due to the Euro zone debt crisis and slower US growth.
III	Employment Forecast for October – December 2011
7.	Hiring expectations in the manufacturing sector for the fourth quarter of 2011 are expected to be weaker compared to the third quarter of 2011. A weighted balance 7 per cent of manufacturers plan to hire workers while a weighted 9 per cent expect to reduce the number of workers needed. Overall, a net weighted 2 per cent of manufacturers foresee lower employment in the fourth quarter of 2011. Within the manufacturing sector, the transport engineering cluster is the most optimistic about employment opportunities while the electronics, precision engineering and general manufacturing industries clusters expect to shed some workers in the next three months.
IV	Factors Affecting Export Orders for October - December 2011
8.	A weighted 51 per cent of firms in the manufacturing sector reported no limiting factors that will affect their ability to obtain direct export orders in the fourth quarter of 2011. Of the weighted 40 per cent of firms that indicated export constraints, price competition from overseas competitors and economic & political conditions abroad are the most important limiting factors.
	Editors' Note:   For media enquiries, please contact  Ms Karen Lin  (Tel: 6832-6587 / hp: 9623-0355 / Email: karen_lin@edb.gov.sg). For further information on the business expectation results, please contact  Ms Leong Pui Ling  (Tel: 6832-6737 / hp: 9877-2580 / Email: puiling@edb.gov.sg). Updates on business expectations of the manufacturing sector for the fourth quarter of 2011 are available on http://www.news.gov.sg and http://www.sedb.com Technical Notes The Survey of Business Expectations of the Manufacturing Sector for the fourth quarter of 2011 was conducted between September 2011 and October 2011 by the Economic Development Board. Out of a total of 396 manufacturing establishments surveyed, 91 per cent responded. These establishments were asked to indicate their expectation of general business conditions and other indicators such as output and employment. Their views are expressed in terms of directional change (i.e. "up", "same" or "down"). Individual responses provided by the establishments are weighted by their contribution to employment and value added. These responses are then aggregated at cluster, sub-cluster and overall manufacturing level, and presented in terms of weighted percentages. The net weighted balance is commonly used to reflect the direction and extent of the business sentiments. It is the difference between the weighted percentage of 'up' responses and the weighted percentage of 'down' responses. For example, if weighted responses for overall manufacturing output yields a net weighted balance of +30 per cent, the plus sign before the percentage figure indicates a positive balance or net upward movement, and not a 30 per cent increase in output. Similarly, a minus sign before the percentage indicates a downward trend and not a decline by that amount. About the Singapore Economic Development Board The Singapore Economic Development Board (EDB) is the lead government agency for planning and executing strategies to enhance Singapore’s position as a global business centre.  EDB dreams, designs and delivers solutions that create value for investors and companies in Singapore.  Our mission is to create for Singapore, sustainable economic growth with vibrant business and good job opportunities. EDB’s ‘Host to Home’ strategy articulates how we are positioning Singapore for the future.  It is about extending Singapore's value proposition to businesses not just to help them improve their bottom line, but also to help them grow their top line through establishing and deepening strategic activities in Singapore to drive their business, innovation and talent objectives in Asia and globally.  For more information on how EDB can help your business, please visit www.sedb.com