LOCAL business sentiment is improving for the second consecutive quarter in the first quarter of 2024, amid mixed sectoral outlooks.

Data from the Singapore Commercial Credit Bureau (SCCB) released on Monday (Dec 4) showed that the Business Optimism Index rose slightly for the second straight quarter to +4.48 percentage points in Q1 2024, from +4.35 percentage points in Q4 2023.

Despite the sentiment index still being lower than the +4.73 percentage points in Q1 2023, it is recovering from the two-year low registered in Q3 2023.

Similar to Q4 2023, indicators of sales volume, net profit, selling prices, new orders, and employment levels stayed expansionary, while inventory levels remained contractionary at -2.24 percentage points in Q1 2024.

Only two of the six indicators improved on a quarter-on-quarter basis, namely selling prices and new orders.

Selling prices also rose on the year, to +11.94 percentage points in Q1 2024 from +8.96 percentage points in Q1 2023. Net profit increased to +2.24 percentage points in Q1 2024 from +0.75 percentage point in the same period of 2023. Other indicators either remained the same or deteriorated on a year-to-year basis.

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On a sectoral perspective, the construction and transportation sectors have emerged as the most optimistic sectors with at least five of the indicators in positive territory.

The outlook for the financial and manufacturing sectors has improved slightly as more indicators were positive. Business sentiments within the services sector remained upbeat with four of the six indicators positive.

The wholesale sector, however, remained weak with only two of six indicators in positive territory, despite slight improvements in some of the indicators. 

SCCB’s chief executive officer Audrey Chia said: “Moving into 2024, the outlook for local businesses will remain cautiously optimistic for the first quarter amid downside risks in the global economy, and ongoing geopolitical conflicts.

“However, we are likely to see continued growth in construction and tourism-related sectors, as well as a slight rebound in manufacturing with a projected recovery in demand for electronics and semiconductors.”