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Singapore business sentiment turns positive for Q2, with improved outlook for profits and hiring

Published Mon, Mar 15, 2021 · 12:27 PM

BUSINESS sentiment in Singapore has turned expansionary for the second quarter of this year, following four quarters of negative sentiment, with improved expectations for profits and hiring as well.

On Monday, the Singapore Commercial Credit Bureau's (SCCB) latest quarterly survey of 200 business owners and senior executives showed the indicator for overall business sentiment at +3.94 percentage points for Q2, versus -1.03 percentage points in the previous quarter, and -7.88 percentage points in Q2 2020.

Quarter on quarter, all of the six indicators SCCB studies - volume of sales, net profits, selling price, new orders, inventory levels and employment levels - also improved.

In particular, businesses' expectations for net profits, employment and selling price had the most improvement. The indicator for net profits is up at +9.92 percentage points for Q2, from +3.85 percentage points a quarter ago.

Similarly, employment sentiment has improved to zero percentage point for Q2, from -7.69 percentage points a quarter ago. Expectations for selling price have also recovered to +1.53 percentage points for Q2, from -8.46 percentage points in the previous quarter.

That said, SCCB chief executive Audrey Chia noted that the improvement in business sentiment is uneven across different sectors, with both construction and transportation still experiencing a muted outlook from "weakness in building activities and a slower pace of border reopening amidst a global surge in Covid-19 cases and a more contagious strain of the virus".

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On the other hand, the financial services, wholesale trade and manufacturing sectors are continuing to experience growth and demand both locally and globally, Ms Chia said.

Of the sectors SCCB surveys, the outlook for the financial sector has been the most optimistic, with positive expectations on all fronts.

Expectations for net profits, for instance, rose to +36.36 percentage points for Q2, from +9.09 percentage points in the previous quarter. Hiring sentiment also improved to +36.36 percentage points for Q2, from +27.27 percentage points a quarter ago.

Within the construction and transportation sectors, however, the outlook remains negative. For construction, expectations for net profits are unchanged at -8.33 percentage points for Q2. Hiring sentiment also remains down, at -16.67 percentage points for Q2, although it is an improvement from -33.33 percentage points in Q1.

Likewise in transportation, the outlook for net profits remains negative, at -18.18 percentage points for Q2, from -36.36 percentage points in Q1. The outlook for hiring is also still negative, with the indicator at -9.09 percentage points for Q2, but an improvement from -18.18 percentage points in the previous quarter.

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