No respite from S'pore's economic headwinds

FOR well over a year now, the Singapore economy has been in a funk of sorts. While none of the looming external threats actually grew into any full-blown crisis, the various uncertainties - from eurozone woes to China's slowdown, from falling oil prices to rising interest rates - have created economic headwinds that, together with domestic restructuring pains, have hit both growth and sentiment.

The latest figures offer no respite: Singapore's September industrial production data show an eighth consecutive month of manufacturing contraction, and raise anew the spectre of technical recession in the third quarter, something which was just narrowly averted when the gross domestic product (GDP) flash estimates were released in mid-October. Economists believe that the economy will underperform the official 2015 full-year growth forecast of 2-2.5 per cent, an already weak range that would spell Singapore's lowest growth since the 2008/2009 global financial crisis.

Ahead of the lacklustre economic numbers, sentiment has been poor on the ground for a while, among both businesses and consumers. BT's own quarterly business climate survey - which covered 181 Singapore companies in the second quarter - found firms being rather more bearish about near-term business prospects than before, and with the pessimism prevalent across the board, not just among small local firms. And just as telling, consumer confidence has also fallen, as tracked by an ANZ-Roy Morgan index: The indicator fell for a second straight month in October, with respondents saying that they were less upbeat about personal finances and would not make big-ticket household purchases.