SINGAPORE - Local business confidence dropped to a near two-year low for the final quarter of 2019, according to Singapore Commercial Credit Bureau (SCCB)'s latest Business Optimism Index study, with manufacturing and wholesale trade braced for a downturn.
Business sentiment dipped from +6.91 percentage points in Q3 to +4.82 percentage points in Q4.
Year-on-year, it nearly halved from +9.19 percentage points in Q4 2018.
Five out of six indicators were lower in Q4 2019 versus the previous quarter.
The figures were derived from polling 200 business owners and senior executives representing major industry sectors across Singapore, and are calculated by subtracting the percentage of respondents expecting decreases from the percentage expecting increases, said SCCB in a report on Monday (Sept 16).
Compared to the previous quarter, sales, profits, new orders, employment and inventory levels all fell while only selling price, which remains negative, went up from -7.32 percentage points to -3.33 percentage points.
This was the direct opposite of the previous quarter, when all indicators, except selling price, rose.
On a year-ago basis, only employment rose, jumping from +4.39 percentage points to +14.44 percentage points.
Sector-wise, the financial industry was the most optimistic with all indicators in the green versus the previous quarter except selling price, which still rebounded from -20 percentage points to 0 percentage points.
Five indicators increased for transportation, but three - sales, net profits and inventory levels - came in at 0 percentage points, while the remaining three were positive.
Three indicators were positive for construction, while selling price dropped from +20 to 0 percentage points and inventory levels and new orders remained negative. Notably net profits rebounded from -20 percentage points to +50 percentage points while volume of sales rose from +20 to +50 percentage points. Employment levels remained upbeat at +20.0 percentage points.
Manufacturing and wholesale trade were the most downbeat sectors. Manufacturing had employment as its sole positive indicator and wholesale trade had none.
The less positive business sentiment comes after the Ministry of Trade and Industry in August lowered Singapore's 2019 economic growth forecast to 0 to 1 per cent from 1.5 to 3.5 per cent.
Audrey Chia, SCCB's chief executive officer, said: "Most sectors are experiencing a downturn for the final quarter of 2019, most noticeably the manufacturing and wholesale trade sectors. This is largely due to trade tensions affecting international supply chains, shrinking imports from China and a generally muted global outlook. This has led to negative spillover effects on the vulnerable trade-related sectors.
"Despite the moderated outlook, we are still seeing signs of green shoots in certain sectors such as the construction, transportation and services sectors. Growth in these sectors are expected to be sustained into the remaining months of the year," she added.