SINGAPORE, Jan 31 — Companies in the Republic’s manufacturing and services sectors expect a less favourable climate for business in the first half of this year, with sentiment weighed down by uncertain global economic conditions, two official surveys showed on Friday.

In the manufacturing sector, a quarterly survey found that a weighted 29 per cent of firms expect business conditions to worsen in the January-to-June period, compared with the last three months of 2015, said the Economic Development Board (EDB).

Meanwhile, only a weighted 7 per cent of respondents expect conditions to improve, while the remaining 64 per cent expect the situation to remain the same.

“Business outlook in the manufacturing sector is expected to be weak in the first half of 2016, on the back of global economic uncertainties, the ­ongoing slowdown in China and a low oil price environment,” said EDB.

In the previous survey released in October last year, a weighted 26 per cent of manufacturers foresaw deterioration in the six months to March this year, while 10 per cent felt that conditions would improve.

On the latest poll, CIMB Private Banking economist Song Seng Wun said: “I would be surprised if the survey showed otherwise. This is consistent with our expectations. Singapore manufacturing is export-oriented, and global demand has become softer. That’s already reflected in our output.”

Official data earlier this week showed that Singapore’s manufacturing output slumped 5.2 per cent last year from 2014, the first decline since 2009 when the economy was reeling from the effects of the global crisis. It was also the worst performance in 14 years after production plummeted 11.6 per cent during the dotcom collapse in 2001.

The EDB survey found that the weak business sentiment is broad-based, with almost all clusters foreseeing a decline in business conditions over the six months to June. The ­exception is the biomedical manufacturing cluster, where all firms ­expect conditions to either improve or stay the same. Within the biomedical cluster, firms in the pharmaceuticals and medical technology segments are ­optimistic, as there are plans to introduce new products in the former while strong export demand is expected in the latter, said the EDB.

Among the other clusters, electronics and transport engineering emerged as the most pessimistic, with a net weighted balance of 32 per cent and 39 per cent of firms, respectively, foreseeing a less favourable business situation. The EDB singled out marine and offshore engineering as a segment that will face particularly challenging times, as demand for rigs and offshore conversions has been dampened considerably by persistently low oil prices. Crude prices have fallen 70 per cent since June 2014, hit by a combination of a strong US dollar, a supply overhang and wobbly demand amid global economic uncertainty.

In the services sector, a weighted 28 per cent of firms foresee a slower business outlook in the six months to June, far exceeding the weighted 10 per cent of companies that are ­optimistic, the Department of Statistics said today. The majority of survey respondents, a weighted 62 per cent, anticipate the level of business activity to remain the same.

All industries within the services sector expect the outlook to stay the same or decline. The accommodation and food services sector saw the largest proportion of firms that expect activity to soften after brisk business during the year-end holidays.

The weakening sentiment in the manufacturing and services sector surveys indicates that the underlying growth momentum will slow in the coming months, said economists.

“But is it doomsday yet? I don’t think so. We are not in a recession, there is still growth, but it is slow,” said Song. — TODAY