Business sentiment in Singapore’s manufacturing and services sectors remains optimistic for the second half of 2026, according to the latest government surveys. Despite ongoing global economic and geopolitical uncertainties, firms are projecting a generally positive outlook through December. The Economic Development Board reported that a net weighted balance of 12 percent of manufacturers expect improved business conditions, while a net weighted balance of 19 percent of services firms share a similar positive sentiment.
Growth in these sectors is heavily supported by the global artificial intelligence boom. Precision engineering and electronics companies, particularly those involved in semiconductor equipment and chip production, are leading the manufacturing sector’s optimism. These businesses are benefiting from sustained international investment in AI-related infrastructure. Similarly, the services sector is finding confidence in upcoming major events, such as the Formula 1 Singapore Grand Prix, which is expected to drive tourism and boost occupancy rates in the accommodation industry.
However, the outlook is not uniform across all industries. The chemicals cluster remains the most pessimistic, as companies continue to face high costs linked to feedstock supply disruptions in the Middle East. Additionally, general manufacturing firms have expressed caution regarding rising expenses for fuel, freight, and raw materials. Despite these specific challenges, the overall sentiment suggests that the economy is maintaining a firm footing as it navigates a complex global environment.
Looking ahead, businesses are closely monitoring external factors such as international price competition and potential changes in global trade policies. While the current outlook remains constructive, the sustainability of this growth will likely depend on the continued strength of the AI-driven tech cycle and the ability of firms to manage rising operational costs. For the public, these findings point to a stable employment environment in the near term, even as specific industries continue to adapt to global pressures.