Business confidence in Singapore economy rises in second quarter

BUSINESS confidence in Singapore's economy for the second quarter of this year has bounced back up, led by rising optimism in the services and wholesale trade sectors from a gloomy outlook in the preceeding quarter, according to a latest quarterly survey.

The quarterly Business Optimism Index (BOI) rose to an expansionary 2.66 percentage points for the second quarter from a -1.22 percentage points in the first quarter, based on a survey by Singapore Commercial Credit Bureau (SCCB) that gauges the perception among businesses based on key parameters such as net profits, selling prices, new orders, inventory levels and employee count.

On a year-on-year basis, BOI is up marginally from +0.89 percentage points in Q2 2016 to +2.66 percentage points in the quarter under review.

Sentiments over five indicators - sales volume, net profits, selling price, new orders and employment levels - except for inventory levels have improved on a quarter-on-quarter basis. On a yearly basis, all five areas are showing signs of improvement.

Both services and wholesale trade sectors have emerged as the most optimistic sectors for the second quarter with five business indicators in the expansionary zone. While sentiments within the manufacturing sector have improved significantly with visible increases seen in the five indicators, the outlook for the construction sector has deteriorated with all six business indicators moderating downwards.

"The unprecedented surge in optimism within the wholesale trade sector reflects a recovering overall global demand which is expected to provide growth support to our local economy in the coming months," said SCCB chief executive Audrey Chia in a statement issued on Wednesday.