BUSINESS confidence in Singapore remains weak in the fourth quarter of last year despite a slight increase, according to a joint survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).

Their 'Global Economic Conditions Survey (GECS) Report: Q4, 2016' - which garnered 4,551 responses between November 24 and December 13, 2016 - showed declining income, shrinking order books, staff cuts and hiring freeze among the nagging concerns.

"Singapore's confidence levels remain weak by historical standards, despite a slight uptick in Q4. An important factor to consider is a slowdown in the growth of the city-state's labour force, linked to lower fertility, aging and an already high labour force participation,'' the report said.

Elaborating, it said that the first reason for this is the weak outlook for global demand for goods, which will drag on exports.

"Any changes in US trade policies would hit Singapore as it is a significant re-exporter of goods."

The second reason is interest rates, which are forecast to rise over the coming year as the US Fed moves to normalise monetary policy. The city-state's households will need to adjust to higher borrowing costs which will weigh on consumer spending.

However, Reuter Chua, country head of ACCA Singapore, said there are positive news.

"Despite these concerns, the global economy may turnaround in 2017 as China finished a tumultuous 2016 on a positive note, with consumer spending and the property market rebounding, and the US already in a partial recovery."

Globally, confidence also dipped in the fourth quarter amid a rise in political and economic risks. A key reason for the decline in global confidence was a drop in the government expenditure index component of GECS, which is now at its lowest level since the start of 2016.

The decline in overall confidence is also due to weaker prospects in both the Organisation for Economic Co-operation and Development (OECD) and non-OECD economies. Confidence fell in China, Western Europe and the UK, and rose only slightly in the US.