A GROWING number of manufacturers in Singapore are expecting worse times in the months ahead, though things are looking more cheery in the services sector.

A business expectations survey, released by the Economic Development Board (EDB) yesterday, found a greater level of pessimism.

A separate survey from the Department of Statistics (DOS) showed that many firms in the hotel and information and communications industries expect business conditions to improve.

According to the EDB's survey, 20 per cent of manufacturers surveyed expect less favourable conditions, while only 13 per cent see things improving. Most believe the situation will stay the same.

Subtracting the 13 per cent of optimists from the 20 per cent of pessimists gives a net weighted 7 per cent of manufacturers that expect business conditions to deteriorate from last month to September.

This is in contrast to the board's previous survey in January, when a net 2 per cent expected improving business outlook.

Economies across Asia are bracing themselves for a slowdown this year, as economists say the vital export market - the United States - may already be in a recession.

CIMB-GK economist Song Seng Wun said: 'Import prices have gone up, so manufacturers are worried about whether the end-demand in Organisation for Economic Co-operation and Development countries will continue to be as robust as it has been.'

Manufacturing accounts for about a quarter of Singapore's $245 billion economy. Most factory output is exported, a third of which is ultimately sold to consumers in the US and Europe.

The DOS data on the more optimistic services sector showed that firms in industries such as wholesale, information and communications and real estate expect growth in both operating receipts and employment for the second quarter over the first quarter.

Hoteliers in particular - 69 per cent - expect to do brisk business for the next six months, with 7 per cent of them expecting to lift employment in the same period.

The catering industry also projects higher receipts in the coming months. The upbeat mood in these two segments reflects the positive sentiment in the tourism market, which is set to be buoyed by upcoming events such as the Formula One Grand Prix.

There is, however, one segment of the services sector that expects rocky times ahead - retail. Supermarkets and jewellery and watch retailers alike expect slower business in the coming months. Car dealerships, too, are worried, given the reduced Certificate of Entitlement quota.

Mrs Jannie Tay, president of the Singapore Retailers Association and vice-chairman of watch retailer The Hour Glass, said: 'Retailers have had very good business until March. The following six months hold a lot of uncertainty purely because, for example, costs of operations are higher and inflation is rising.'

But, she added, Singapore is unique because there is greater wealth here. 'We're not totally pessimistic. People with money still have money to spend, they're just more cautious.'

This article was first published in The Straits Times on May 1, 2008.