Singapore business confidence rises for Q1 next year: Survey

The Singapore Commercial Credit Bureau survey found that the service and financial sectors were the most optimistic, while wholesale, construction and manufacturing were the gloomiest.
The Singapore Commercial Credit Bureau survey found that the service and financial sectors were the most optimistic, while wholesale, construction and manufacturing were the gloomiest.ST FILE PHOTO

Local business sentiment is showing signs of a recovery after being weighed down for most of the year by a trade war that has blurred the global outlook.

Business confidence strengthened to +5.31 percentage points for the first quarter of next year from the near two-year low of +4.82 percentage points for the fourth quarter of this year, noted the Singapore Commercial Credit Bureau (SCCB) yesterday.

But its Business Optimism Index (BOI) fell to +5.31 percentage points for the first quarter of next year from +7.19 percentage points for the first quarter of this year.

"Despite the muted outlook among local firms for most of 2019, we expect a slight turnaround in sentiments moving into (the first quarter of next year)," said SCCB chief executive Audrey Chia.

The service and financial sectors were the most optimistic, while construction, wholesale and manufacturing were the gloomiest. Key challenges to business included global economic uncertainties, increased competition and rising business costs.

The BOI, which is released quarterly, peaked in the third quarter of last year as the tit-for-tat tariffs imposed by China and the United States disrupted supply chains, decelerating economic growth across the globe. Gross domestic product in China, one of Singapore's top trading partners, expanded in the last quarter at its slowest pace in almost three decades.

Ms Chia said: "Global uncertainties and decelerated growth in China will continue to weigh on sentiments in externally oriented sectors such as wholesale trade. Hence, we expect overall business optimism to remain lukewarm for the first quarter of 2020."

The SCCB survey of 200 business owners and senior executives from major industries across Singapore also showed that firms have a mixed outlook about their investments next year compared with this year.

It noted that 73 per cent expect investments to remain unchanged.

The top two most important areas of investment for next year were information technology, and machinery and capital equipment.

A version of this article appeared in the print edition of The Straits Times on December 04, 2019, with the headline 'Singapore business confidence rises for Q1 next year: Survey'. Print Edition | Subscribe