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Singapore business sentiment up slightly in Q1 2020: poll
BUSINESS sentiment among local firms has risen slightly for the first quarter of 2020, with the services sector being the most upbeat, according to Singapore Commercial Credit Bureau’s (SCCB) latest Business Optimism Index study.
Business sentiment rose to +5.31 percentage points in Q1 2020 from +4.82 percentage points in Q4 2019, with five of six indicators in the positive zone with the exception of inventory levels.
Year on year, it fell 1.88 percentage points from +7.19 percentage points in Q1 2019.
Three out of six indicators were lower in Q1 2020 versus the previous quarter. Similarly, on a year-on-year basis, three indicators increased and three fell.
Employment, inventory levels and new orders slipped versus the previous quarter, while net profits, volume of sales and selling price increased.
Employment levels saw the largest drop to +2.99 percentage points from +14.44 percentage points, while inventory sunk into negative territory, from +2.22 percentage points to -0.50 percentage point.
On the other hand, selling price increased from -3.33 percentage points to +8.96 percentage points.
The study polled 200 business owners and senior executives representing major industry sectors across Singapore, with figures calculated by subtracting the percentage of respondents expecting decreases from the percentage expecting increases, said SCCB.
The services sector was the most optimistic for Q1 2020, with all six indicators in the green. Selling price jumped to +29.03 percentage points from -12.90 percentage points in Q4 2019.
Employment levels was the only indicator that fell, from +12.90 percentage points to +6.56 percentage points.
Financial services was also upbeat, with five of six indicators in the green, while transportation and manufacturing were mixed with three positive and three negative indicators.
Construction and wholesale trade were the worst off, with four negative indicators each.
For construction, volume of sales and net profit each tumbled from +50 percentage points to -10 and -20 percentage points respectively.
Wholesale saw less drastic changes as the sector was already downbeat in the fourth quarter.
Compared to 2019, local firms have a mixed outlook about their investments for 2020, said SCCB.
About 17 per cent expect an increase in investments for 2020, up from 14 per cent in 2019, but 10 per cent expect a decrease in investments, up from 7 per cent in 2019.
A majority of local firms, 73 per cent, expects investments to remain unchanged in 2020.
The two most important areas of investment for 2020 are information technology (39 per cent), and machinery and capital equipment (24 per cent).
“Despite the muted outlook among local firms for most of 2019, we expect a slight turnaround in sentiments moving into Q1 2020. The services and financial sectors will remain key pillars of growth, while manufacturing and construction sectors will see a softer outlook in the coming months,” said Audrey Chia, SCCB’s chief executive officer.
“For 2020, firms are mixed about their investments for expansion plans compared to the previous year. The expected increase in investments is most marked within the services sector as compared to manufacturing and construction,” added Ms Chia.
Source: https://www.businesstimes.com.sg/government-economy/singapore-business-sentiment-up-slightly-in-q1-2020-poll