Singapore business confidence drops to second lowest point in 4 years: Survey

Singapore business confidence drops to second lowest point in four years. PHOTO: ST FILE

SINGAPORE - Local business confidence has taken a turn for the worse, falling to the second lowest point in four years, according to a survey released on Monday (Dec 12).

The Singapore Commercial Credit Bureau (SCCB)'s latest quarterly Business Optimism Index (BOI) study showed the level of confidence slipped from +2.87 percentage points for the fourth quarter of 2016 to -1.22 percentage points for the first three months of next year.

On a year-on-year basis, the BOI has improved slightly but remained in the contractionary zone from -2.93 percentage points for Q1 2016 to -1.22 percentage points for Q1 2017.

Both the wholesale trade and financial services sectors emerged as the most pessimistic for next year with five business indicators in the contractionary zone. Meanwhile, the services sector was the most optimistic with six business indicators in the expansionary zone due to an increase in tourist arrivals, sustained improvements in the food and accommodation, information and communications and social services sub-sectors.

However, SCCB has also noted a slight moderation in three of six indicators for Q1 2017.

Compared to 2016, there is a slight increase in firms which have anticipated a reduction in investments for business expansion in 2017. According to SCCB, the proportion of firms which have expected a decrease in investments for business expansion has risen from 4 per cent in 2016 to 9 per cent in 2017.

Meanwhile, the proportion of firms expecting investments to increase remained unchanged at 6 per cent for 2017. The majority of local firms surveyed has anticipated investments to remain unchanged at 85 per cent.

The SCCB Business Optimism Index (BOI) is a measure of business confidence in the economy. Released quarterly, it is based on a business sentiment survey that is designed to capture business expectations and is one of the most effective ways to track how the community perceives the business environment, and where it thinks it is moving, said SCCB.

Overall Business Optimism Score, Q1 2014 - Q1 2017.
Main challenge in 2017.

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