LOCAL business sentiment continued to decline for the third consecutive quarter as the outlook for services and wholesale sectors deteriorated slightly in the fourth quarter of 2022.
According to data from the Singapore Commercial Credit Bureau (SCCB) released Tuesday (Sep 13), its quarterly Business Optimism Index fell to +4.98 percentage points for Q4 from +5.1 percentage points in the previous quarter, and from +5.78 percentage points in Q4 2021.
Five of 6 indicators - volume of sales, net profit, selling prices, new orders, inventory levels and employment - remained expansionary for the latest quarter, unchanged from the third quarter.
A total of 3 of 6 indicators saw quarter-on-quarter improvements as compared with only 2 in Q3.
Volume of sales rose to +2.99 percentage points from +2.24; selling prices increased to +9.7 percentage points from +8.96 percentage points, while inventory levels rebounded to +2.24 percentage points from -2.24 percentage points in Q3.
On the other hand, new orders remained expansionary at +10.45 percentage points, while employment levels moderated slightly to +8.96 percentage points from +9.7 percentage points in Q3.
Year on year, 2 of 6 indicators improved in Q4 with selling prices rising to +9.7 percentage points from 0 percentage point previously, and inventory levels rebounding to +2.24 percentage points from -5.35 percentage points.
Net profit dropped to 0 percentage point from +9.63 percentage points the previous year, while employment levels fell to +8.96 percentage points from +12.12 percentage points in Q4 2021.
New orders dipped slightly to +10.45 percentage points from +10.69 percentage points, and volume of sales moderated strongly to +2.99 percentage points from +7.52 percentage points in Q4 2021.
SCCB noted that sentiments within the transportation, financial, manufacturing and construction sectors remain relatively upbeat with all 6 indicators for each sector in positive territory.
Outlook for the services sector, however, moderated further as only 5 of 6 indicators were in positive territory, with inventory levels remaining in the negative zone.
Sentiments within the wholesale sector deteriorated visibly with all 6 indicators in negative territory, after both volume of sales and net profits fell into the contractionary zone from the previous quarter.
SCCB's chief executive Audrey Chia attributed the "overall lukewarm outlook" for local businesses to weakening external demand, escalating geopolitical tensions and an overall slower pace of global growth.
"However, visible improvements were seen in both transportation and construction sectors owing to strong recovery in international air travel and a pickup in consumer-facing services," added Chia.