The Singapore Commercial Credit Bureau’s (SCCB) Business Optimism Index showed that Singapore companies were less confident of the business environment going into 2019. Business confidence among local firms fell for the second consecutive quarter, from +9.19 percentage points for the last quarter of 2018 to +7.19 percentage points for the first quarter of 2019. A total of 200 business owners and executives were polled for the index, which represents the net percentage of respondents expecting improvements in the coming quarter.
Six indicators were included in the survey: selling price, new orders, inventory levels, sales volume, net profits and employment levels. While the first three indicators (selling price, new orders and inventory levels) recorded a positive outlook, the latter three (sales volume, net profits and employment levels) decreased on a year-on-year basis – with “net profits” showing the largest decline and falling into the contractionary zone.
Nevertheless, the figures were an improvement when compared to the same period a year ago, which registered at +4.29 percentage points. The index also revealed that the sectors of services, transportation and wholesale held the most optimistic positions.
In addition, Singapore companies expressed more confidence regarding investments in business expansion for the year ahead. SCCB’s Chief Executive Officer Audrey Chia highlighted that “this is particularly in the area of technological investments in software, infrastructure and upskilling of employees for ICT (information and communications technology) training programs”.
On the main challenges for 2019: 32% of the companies indicated global economic uncertainties; 26% underlined higher business costs; and 22% pointed to increased competition.
Moving into the first quarter of 2019, Chia predicted “visible signs of moderation in the outlook for local firms, particularly within the manufacturing sector in light of muted global demand and softer growth within the region”. She added that “the services and financial sectors will continue to remain the key sectors for growth…while the construction sector is one of the least optimistic, we are seeing signs of green shoots with the surprising rebound in optimism levels”.
Source: The Straits Times