Small and medium-sized enterprises are expecting dark clouds in the six months ahead, as the global economic slowdown continues amid prolonged uncertainties from trade tensions between China and the United States.

SMEs in manufacturing logged lower turnover expectations due to slowing demand for goods. Those in commerce and trading are expecting worse profit growth for the fourth straight quarter.

Meanwhile, SMEs in the retail and food and beverage (F&B) sector saw the biggest slide in optimism surrounding business expansion.

These were findings from the latest SBF-Experian SME Index, a joint initiative of the Singapore Business Federation (SBF) and information services company Experian.

The index was based on a survey of more than 3,600 SMEs between July 8 and Aug 16, and registers expectations in seven areas: Turnover, profitability, business expansion, capital investment, hiring, capacity utilisation and access to financing.

The softer business outlook for the fourth quarter of this year and the first quarter of next year comes amid the Ministry of Trade and Industry's revision of Singapore's full-year forecast to between zero growth and 1 per cent.

Overall, the index fell from 50.8 to 50.6, reversing the uptrend last quarter.

A reading above 50 indicates that companies expect business to improve in the next six months, while a reading below 50 indicates that they expect lower business activity.

All seven sub-indicators saw declining expectations in the latest quarterly survey, said SBF and Experian yesterday.

The manufacturing sector in particular saw negative turnover expectations due to a global slowdown in demand for manufactured goods.

Profitability expectations fell, marking five consecutive quarters of negative expectations. There was also a decline in hiring expectations.

Lenders appear to be more wary in extending loans to these firms, with the sector seeing the biggest drop in expectations for access to financing.

Manufacturing is not the only sector that has seen dampened sentiment. With no apparent end in sight for the US-China trade war, SMEs in commerce and trading are looking to lower trade volumes, leading to negative profitability and turnover expectations.

These firms are showing less investment appetite as well, suggesting that they are scaling back growth prospects and doubling down on existing resources.

While SMEs in retail and F&B displayed the most optimism in turnover expectations, they also saw an overall decline in sentiment.

The sector appears to be managing aspirations in view of a challenging environment for the foreseeable future.

Only the construction sector emerged unscathed, registering positive gains in several indicators. This was attributed to strong public sector construction activities.

Mr James Gothard, Experian's general manager for credit services and strategy in South-east Asia, called the decline in optimism among SMEs in retail and F&B "troubling", noting that it could point to how economic uncertainty has impacted consumer sentiment, affecting domestically oriented sectors.

He said SMEs should adjust their strategies, such as by embracing digital solutions to boost efficiencies.

SBF chief executive Ho Meng Kit said: "Our SMEs are expecting a tighter credit environment, which may impact cash flow.

"Bigger companies can step up and help by providing timely payments and fair payment terms to their smaller partners and suppliers."