sin02

Singapore’s Q2 business outlook deteriorates for fifth consecutive quarter: SCCB

WEIGHED down by negative sentiment in the manufacturing and wholesale trade sectors, the Singapore Commercial Credit Bureau’s (SCCB) business optimism index (BOI) for Q2 2023 fell further to +4.6 percentage points from +4.73 percentage points the previous quarter, and from +5.35 percentage points for Q2 2022.

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

On Tuesday (Mar 14), SCCB said this represented the fifth consecutive quarter of declining local business sentiment, albeit slight.

“The outlook for local businesses has deteriorated slightly owing to a slowdown in 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 Q2 2023 from +8.96 percentage points.

All other indicators for Q2 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 from to +7.46 percentage points in Q2 2023 from +8.21 percentage points the prior quarter.

Inventory levels fell deeper into the red to -4.48 percentage points from -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 Q2 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 03.85 percentage points each, from 0 percentage point 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 BOI data for Q2 2023, Chia observed “visible moderations” in sentiment across the services and financial sectors for Q2 2023.

In the services sector, selling prices near-doubled to +18.18 percentage points, from +9.09 percentage points 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 Q1 2023, while net orders rose to +21.43 percentage points from +7.69 percentage points. 

Source: https://www.businesstimes.com.sg/singapore/singapores-q2-business-outlook-deteriorates-fifth-consecutive-quarter-sccb