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Slight improvement in Singapore business sentiment for Q1 2022 despite Covid uncertainties: SCCB
BUSINESS confidence among local businesses has increased marginally for the first quarter of 2022, reaching a 2-year high despite continued uncertainties in the Covid-19 trajectory, the Singapore Commercial Credit Bureau (SCCB) said on Tuesday (Dec 7).
In a press statement, the subsidiary of credit and risk information solutions provider Credit Bureau Asia said its quarterly Business Optimism Index inched up further, from +5.8 percentage points in Q4 2021 to +5.9 percentage points in Q1 2022.
The index hit a low with a score of almost -8 percentage points in Q2 2020 when the impact of Covid-19 was in full swing. A year ago, the sentiment for Q1 2021 was still in the negative region, at -1 percentage point.
The index is the outcome of SCCB’s quarterly survey of 200 business owners and senior executives. The participants were asked if they expect increases, decreases or no changes in their upcoming sales, profits, employment, new orders, inventories, and selling prices.
SCCB said this time round, 3 indicators experienced improvements on a quarter-on-quarter basis, but 5 of the 6 indicators are now expansionary, up from 4 in Q4 2021.
The 3 which recorded an improvement from Q4 2021 are selling price, which increased from 0 to +3.73 percentage points; inventory levels, which went up from -5.4 to -0.8 percentage point; and employment levels, which rose from +12.1 to +13.5 percentage points.
Volume of sales moderated from +7.5 to +3.8 percentage points; new orders moderated slightly from +10.7 to +10.5 percentage points; while net profits fell from +9.6 to +4.6 percentage points.
Commenting on the results, Audrey Chia, SCCB’s chief executive officer, said the slower pace of increase in the index reflects a “slight moderation” in sentiments among certain sectors, particularly manufacturing, services and wholesale trade.
“There are still lingering uncertainties regarding the new Omicron variant and how this could potentially impact global economic developments. Hence, we expect the overall outlook of firms here to remain lukewarm moving into the new year,” she added.
SCCB pointed out that while the outlook in the manufacturing sector is “relatively most upbeat” with all 6 indicators in the positive territory, both its sales volume and net profit moderated from +11.1 to +7.4 percentage points.
As for the services sector, SCCB noted that employment levels fell into the negative territory to -6.8 percentage points, from +4.6 percentage points in Q4 2021, even as new orders jumped from +2.3 to +6.8 percentage points.
Meanwhile, most indicators remained unchanged within the wholesale sector. Volume of sales and net profit fell from +13.3 and +18.8 percentage points respectively in Q4 2021 to zero growth, while selling price and employment both slipped from +6.25 percentage points.
In terms of sales volume, the financial sector – which has 5 of 6 indicators in the positive territory in comparison – is the most upbeat, at +16.7 percentage points, although growth had moderated from +41.7 percentage points in Q4 2021.
The mining and agriculture sectors are the most pessimistic, anticipating volume of sales to be at -40 and -20 percentage points, respectively.
The Ministry of Trade and Industry said last month that Singapore’s gross domestic product growth is expected to come in at 3 to 5 per cent in 2022.
Source: https://www.businesstimes.com.sg/sme/slight-improvement-in-singapore-business-sentiment-for-q1-2022-despite-covid-uncertainties-sccb