Business optimism in Singapore plunged to near contractionary levels this quarter, after two straight quarters of expansion previously.
Research firm Dun & Bradstreet's latest Business Optimism Index (BOI), conducted every quarter, shows the percentage of companies expecting higher profits and sales volumes has fallen over the previous quarter.
The survey polled 200 business owners and senior executives across six Asean nations representing major industry sectors on six indicators of optimism: expectations of upcoming quarterly sales, profits, employment, new orders, inventories and selling prices.
Firms here recorded a BOI of 0.14 percentage point this quarter, dramatically lower than the 14.6 percentage points the quarter before. The index is obtained by subtracting the percentage of pessimistic firms from the percentage of optimistic firms.
The latest BOI reading is the second lowest in nearly three years when it hit a historical low of -0.82 percentage point in the first quarter of 2013.
"The outlook for local manufacturers has been particularly bleak for the most part of 2015 in light of a slowdown in manufacturing activities both globally and regionally," said chief executive of Dun & Bradstreet Singapore Audrey Chia.
There has been a general decline in optimism levels across most sectors, even in the more optimistic construction and services sectors.
Overall business optimism for Asean in the next three months is expected to be lacklustre as prevailing global economic uncertainty continues to dampen expectations, said the report.
"The blunted growth trajectory of China, the third largest trading partner for Asean, has also cast shadows on the region," it said.
Singapore's latest purchasing managers' index also showed manufacturing continued to contract. The Purchasing Managers' Index - an early indicator of factory activity - hit 48.6 last month, following a reading of 49.3 in August. A reading below 50 implies contraction.
Economists also said Singapore is likely to enter a technical recession this year, with the global economy looking gloomy
Among the six Asean states surveyed, the Philippines, the fastest-growing economy in the group this year, tops the tables for the most optimistic business climate.
Meanwhile, business confidence has deteriorated sharply in Malaysia and Thailand.