Singapore's private sector business activity growth eased again in February to its slowest in four months, according to a survey released yesterday.
Notably also, private sector businesses were the most pessimistic in the near five-year history of the survey, with the downbeat sentiment attributed to slowing economic conditions, global geopolitical uncertainties and low growth in certain sectors, such as marine engineering and construction.
The headline Nikkei Singapore Purchasing Managers' Index (PMI) stood at 51.4 last month, marginally lower than 51.6 in January.
A separate survey on Thursday that covers just the manufacturing sector showed that factory activity expanded for the sixth straight month in February but at a slower pace due to weaker new orders and exports.
Slower expansions in output and new orders also drove the decline in the Nikkei PMI. Foreign sales also dipped, while further stock depletion weighed on the index.
However, higher buying levels continued to be reported. But there was anecdotal evidence that promotional activities and, in some cases, bulk discounts supported demand, said the survey report.
Much of the headline expansion was underpinned by domestic demand as foreign orders for Singaporean products and services contracted last month after growing for the last five months, said the report.
Commenting on the survey's findings, economist Bernard Aw at IHS Markit, which compiles the survey, said: "The February survey found that the moderating growth trend in Singapore's private sector economy continued on the back of slower expansions in both output and new orders. Lower export sales were seen for the first time since August 2016. All of this led to companies becoming more conservative in hiring. Employment levels grew at the slowest in three months during February.
"At the same time, inflationary pressures seemed to have subsided, as costs rose at a slower rate compared to January. Subsequently, companies raised prices for their products and services only moderately. That staves off concerns that consumers may face increasingly higher inflation in the months ahead."
Mr Aw said there are several fiscal measures in Singapore's Budget this year that will help support economic expansion.
"In particular, the bringing forward of public infrastructure projects should benefit the flagging construction sector," he said. "Additionally, corporate and personal income tax rebates could also boost investments and consumption."