Business confidence within Singapore's manufacturing sector improved significantly, ascending to 11 in the fourth quarter of 2025 from a previous 8. This represents the year's peak, indicating a surge in optimism. The electronics sector, with an impressive index of +33, continues to spearhead this growth, driven by the ongoing demand for semiconductors related to AI. Similarly, the transport engineering sector maintains a strong positive outlook at +10, bolstered by robust demand for aerospace maintenance. In the biomedical manufacturing sector, confidence has turned modestly optimistic at +8 due to anticipated increases in pharmaceutical exports. Conversely, sentiment in the chemicals sector has dipped to -17, reflecting concerns over macroeconomic instability, poor refining margins, and overproduction. Looking ahead to the first quarter of 2026, projections for output are slightly positive at +6, with a majority of industry clusters predicting an increase in production. Employment levels are expected to remain steady, as most firms forecast no significant changes to their workforce sizes.