SINGAPORE (Sept 23): Business confidence for the final quarter has dropped to close to a two year-low, as Singapore’s key manufacturing and wholesale trade sectors brace for a downturn.
Business sentiment has dipped to +4.82 percentage points for 4Q19, from +6.91 percentage points for the current quarter, according to data from the Business Optimism Index released recently by the Singapore Commercial Credit Bureau (SCCB).
On a year-on-year basis, business confidence has nearly halved from the +9.19 percentage points in 4Q18.
The figures represent the difference between the percentage of respondents expecting increases and declines across six indicators: sales, profits, new orders, employment, inventory and selling price.
The data is aggregated from a poll of 200 business owners and senior executives representing major industries across Singapore.
Compared to the previous quarter, results for five out of the six indicators worsened, with only selling price inching up from -7.32 percentage points in 3Q to -3.33 percentage points for 4Q.
These indices were accessed across different sectors: financial, transportation, construction, manufacturing and wholesale trade.
The export-oriented manufacturing and wholesale trade sectors remained downbeat following a slowdown in the electronics, transport engineering and precision engineering sub-segments – a key drag on Singapore’s non-oil domestic exports (NODX).
Meanwhile, the financial, transportation and construction sectors logged more hopeful results.
The financial sector emerged the most optimistic sector, with expectations of sales volumes, net profit, selling price, new orders, inventory levels and employment levels jumping substantially.
The transport and construction sectors saw sustained improvements with respondents anticipating significant expansions.
Audrey Chia, SCCB’s chief executive officer, noted that Singapore’s export-driven sectors have been hit by the effect of trade tensions on international supply chains, as well as shrinking imports from China and a generally muted global outlook.
“This has led to negative spillover effects on the vulnerable trade-related sectors,” she adds.
Still, Chia says there are sectors that can drive the republic’s growth.
“Despite the moderated outlook, we are still seeing signs of green shoots in certain sectors such as the construction, transportation and services sectors. Growth in these sectors are expected to be sustained into the remaining months of the year,” she says.