SINGAPORE – Singapore’s business outlook has darkened again, weighed down by negative sentiment in the manufacturing and wholesale trade sectors.

The Singapore Commercial Credit Bureau’s (SCCB) Business Optimism Index (BOI) for the second quarter of 2023 slipped further to 4.6 percentage points from 4.73 percentage points in the previous quarter, and from 5.35 percentage points for the same period last year.

This was the fifth consecutive quarter of declining local business sentiment, although the latest quarterly drop was slight, SCCB noted.

The index is released quarterly as a measure of business confidence in the economy by SCCB, a subsidiary under credit and risk information solutions provider Credit Bureau Asia.

“The outlook for local businesses has deteriorated slightly owing to a slowdown in the manufacturing and wholesale trade sectors,” said SCCB chief executive Audrey Chia.

“We expect the outlook to be uncertain as rising interest rates, latent vulnerabilities of the global financial system and escalations in geopolitical tensions are likely to weigh on overall business confidence in the coming months.”

Selling price was the only one of six indicators to improve quarter on quarter, rising to 14.18 percentage points for the second quarter of 2023 from 8.96 percentage points.

All other indicators for the second quarter of 2023 deteriorated from the previous quarter.

Volume of sales fell to 1.49 percentage points from 2.24 percentage points previously, while net profits dipped to 0 percentage point from 0.75 percentage point.

New orders dropped to 8.96 percentage points from 9.7 percentage points, while employment levels slid to 7.46 percentage points for the second quarter of 2023 from 8.21 percentage points in the prior quarter.

Inventory levels fell deeper into the red to minus 4.48 percentage points from minus 1.49 percentage points.

Year on year, two out of six indicators saw improvements, namely selling prices and new orders. All other indicators – volume of sales, net profits, inventory levels and employment levels – declined.

The construction, financial, services and transportation sectors have emerged as the most optimistic sectors for the second quarter of 2023.

All six outlook indicators for the construction sector were in positive territory, while five of six indicators saw expansion for the financial, services and transportation sectors.

Sentiment among manufacturers, however, stayed lukewarm, with four of six indicators in positive territory, as the sales volumes and net profit indicators fell to minus 3.85 percentage points each from 0 percentage point in the previous quarter.

Wholesale experienced the biggest declines in sentiment, with five of six indicators in negative territory. While new orders remained unchanged at 0 percentage point, all other indicators were in the contractionary zone.

Commenting on the latest data, Ms Chia observed “visible moderation” in sentiment across the services and financial sectors.

In the services sector, selling prices nearly doubled to 18.18 percentage points from 9.09 percentage points in the previous quarter. All other indicators for the sector experienced broad-based moderation.

Net profit in the financial sector rose significantly to 25 percentage points from 14.29 percentage points in the first quarter of 2023, while net orders rose to 21.43 percentage points from 7.69 percentage points. THE BUSINESS TIMES