Services sector pessimistic about next 6 months

Singapore

COMPANIES in the services sector expect business conditions to worsen in the next six months, while manufacturers see no change.

In two separate surveys, both released on Friday, firms here generally expressed pessimism about how economic conditions would turn out from April to September, although it was a less sombre mood than last quarter.

A net weighted balance of 13 per cent of firms in the services sector expect less favourable business conditions from April till September, compared with October 2015 to March 2016.

The net weighted balance is the difference between the proportion of optimistic and pessimistic firms.

Weak global economic sentiment was cited as a factor for the pessimism, with transport and storage firms expecting lower cargo volumes and hoteliers seeing fewer corporate travellers in the coming months.

Though this latest balance makes it the second most pessimistic in at least nine quarters, it represents a slight upturn from last quarter's low.

In the last quarter, sentiment came in at a balance of -18 per cent, when firms were asked to predict conditions for January to June 2016.

Friday's report, however, is still less optimistic compared with the +3 per cent recorded for the same period last year, or April to September 2015.

Only information and communications, and recreation, community and personal services expect business activity to be better, said the Department of Statistics (DOS), which released results of the Business Expectations Survey. The survey covered 1,500 firms across different industries.

As for manufacturing firms, a small net weighted balance of only one per cent here see better conditions in the period from April to September this year, when compared with the first quarter of 2016.

This stems from a weighted 15 per cent of them expecting improvement, and 14 per cent who see a deterioration.

This Economic Development Board (EDB) survey was conducted in March and April. Out of a total of 433 manufacturing establishments surveyed, 96 per cent responded.