Local business confidence rose for a second consecutive quarter for the three months to June this year, according to a survey released by the Singapore Commercial Credit Bureau (SCCB) yesterday.
Its Business Optimism Index jumped from +4.29 percentage points for the first quarter of this year to +8.5 percentage points for the second quarter. On a year-on-year basis, the index was up from +2.66 percentage points for the second quarter of last year.
The quarterly index gauges the business community's perception of the business environment based on six parameters: volume of sales, net profits, selling prices, new orders, inventory levels and employee count.
The index for the second quarter showed quarter-on-quarter expansion in five indicators except for inventory levels, which contracted.
Services and transportation were the most upbeat sectors.
Sentiment in the service sector was buoyed by growth across most segments, including information and communication, business services, accommodation and food services, SCCB said, while the transportation sector enjoyed business expansion within the water transport and air transport segments.
However, sentiment in the manufacturing sector weakened for the second quarter, dragged down by the growth slowdown suffered by firms in transport engineering and biomedical manufacturing.
Construction was one of the least optimistic sectors with only two business indicators - new orders and inventory - not contracting, due to weak growth within the private building segment.
"We expect the growth outlook to be relatively positive although downside risks will still prevail in 2018," said SCCB chief executive Audrey Chia.
"The transportation and service-oriented sectors will be the key pillars of growth for 2018. However, the outlook for the construction sector is expected to remain lacklustre due to muted construction activities in the coming months."