Singapore business sentiment turns positive after a year in the Covid-19 doldrums

However, the optimism was limited to the financial, manufacturing and wholesale sectors.
However, the optimism was limited to the financial, manufacturing and wholesale sectors.ST PHOTO: KEVIN LIM

SINGAPORE - Singapore companies are looking at the second quarter with a hopeful anticipation they had not expressed in the past 12 months, a survey found.

Local businesses are expecting improved sales volume, net profit, selling prices, new orders, inventory and employment levels in the April-June period, according to Singapore Commercial Credit Bureau's (SCCB) quarterly Business Optimism Index (BOI) released on Monday (March 15).

However, the optimism was limited to the financial, manufacturing and wholesale sectors, while sentiments within the construction and transportation sectors remained downbeat.

The BOI index rose for the third straight quarter to 3.94 percentage points for the second quarter of 2021, from -1.03 percentage points in the previous quarter, to mark the first positive reading after languishing in the negative territory for four straight quarters.

On a year-on-year basis, the index jumped to 3.94 percentage points from -7.88 percentage points for the second quarter of 2020.

The latest survey was based on responses from 200 business owners and senior executives representing major industry sectors across Singapore, indicating the level of business confidence and sentiments that can be used to assess turning points in economic activity and growth.

Ms Audrey Chia, SCCB's chief executive officer, said: "The outlook for local businesses has shown signs of further recovery as we enter into the second quarter of 2021."

The financial services, wholesale trade and manufacturing sectors have, in particular, continued to experience sustained growth and demand both locally and globally, she said.

But the construction and transportation sectors were "still experiencing a muted outlook from weakness in building activities and a slower pace of border reopening amidst a global surge in Covid-19 cases and a more contagious strain of the virus," she added.

The BOI showed that the financial sector had the most optimistic outlook, with all six indicators in the positive zone.

The outlook for the manufacturing sector remained relatively upbeat, with five of the six indicators in the positive territory. Sentiments within the wholesale sector was also optimistic.

In the services sector, three of the indicators - sales, profit and new orders - signalled potential expansion.

Sentiments within the construction sector improved slightly, with selling prices making its way into the positive territory. However, most of the indicators were still negative.

Sentiments within the transportation sector remained weak with four of the six indicators in the negative territory.