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Singapore business confidence weakens for third straight quarter
SINGAPORE businesses are less confident about prospects for the second quarter of 2019, the third straight quarter of waning sentiment, according to the latest quarterly Singapore Commercial Credit Bureau’s (SCCB) Business Optimism Index released on Tuesday.
The overall index eased from +7.19 percentage points in Q1 2019, to +5.08 percentage points in Q2 2019. On a year-on-year basis, the index moderated further from +8.50 percentage points in Q2 2018.
The figures, derived from a survey of 200 business owners and senior executives, represent the net percentage of respondents expecting improvements in the coming quarter compared to the same period last year.
Financial and services sectors have emerged as the most optimistic sectors with all six indicators - volume of sales, net profits, new orders, employment levels, selling price and inventory levels - in the positive region for Q2 2019. The upbeat outlook for financial services was largely driven by robust demand within the insurance services sub-segment, SCCB said.
Though the services sector had six indicators in expansionary zone for the second quarter, three of of the six indicators, namely new orders, inventory levels and employment, showed signs of downward moderation.
Expectations for the construction sector saw continued improvements for Q2 2019 with three indicators - volume of sales, inventory levels and employment - in the positive region.
Separately, both manufacturing and wholesale sectors saw downward moderations in the outlook. SCCB noted that the manufacturing sector saw further moderation in Q2 owing to an expected slowdown within the electronics and precision engineering sub-segments.
Likewise, sentiments within the wholesale sector took a turn for the worse on the back of weaker performance in the wholesale trade of machinery and equipment.
Said SCCB's chief executive Audrey Chia: "The moderation in business sentiments for the next quarter should come as no surprise in light of weaker external demand which has impacted both wholesale trade and manufacturing sectors. This is further exacerbated by the chain effects of a slowdown in China, which has led to a moderated outlook within the region.
"However, the services and financial sectors will remain key drivers of growth for H1 2019. On the overall, we expect the outlook to remain relatively positive given the recent Budget 2019 initiatives which were announced to provide support for firms to innovate and remain adaptable," added Ms Chia.