Anticipated strong demand for semiconductors and oil rigs, and steady business conditions in the pharmaceuticals segment should boost activity in the next six months, the Economic Development Board (EDB) said.

"Overall, a weighted 25 percent of the manufacturers foresee an improved outlook while nine percent predict deterioration," it said.

But on a net weighted basis, the results showed a decline in the number of respondents with a positive outlook with 16 percent of respondents optimistic, down from 24 percent in a similar survey a quarter ago.

"The slightly less bullish sentiment can be largely attributed to seasonal factors," the EDB said.

The survey was carried out between September and October.

Manufacturing is a key component of Singapore's trade-reliant economy, accounting for a quarter of gross domestic product (GDP). GDP is expected to grow 3.5-4.5 percent this year and up to 5.0 percent in 2006.

In the key electronics sector, a net weighted balance of 30 percent of the industries surveyed forecast business conditions would improve in the six months to March 2006.

"This optimistic outlook is led by the semiconductor and computer peripheral segments, which expect increased orders and exports in the last quarter of the year," the EDB said.

Firms in the data storage segment were less optimistic as they continue to phase out low-end computer disc drives while makers of information and communication devices and consumer electronics expect lower output after a cyclical peak in the third quarter.

Optimism is also running high in the marine and offshore engineering cluster on expected contracts for ship-building and ship conversion.

Companies in this segment expect more orders for oil rigs and oilfield equipment as exploration expands, with replacement rigs for those damaged by Hurricane Katrina in the US Gulf Coast region giving a further boost.

Singapore's aerospace sector expects to benefit from more commercial aircraft repair and servicing business in the final three months of the year.

The biomedicals sector, which is dominated by pharmaceuticals, expects conditions "to remain the same" in the next six months.

Pharmaceutical companies however expect to increase output in the fourth quarter compared with the third.

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