Business outlook for Q2 2017 rebounds
SINGAPORE — Business sentiments for the second quarter of the year has picked up, following a pessimistic outlook in the preceding quarter, according to the Singapore Commercial Credit Bureau’s (SCCB) latest quarterly Business Optimism Index (BOI). The BOI is a measure of business confidence in the economy. Released quarterly, it is based on a business sentiment survey designed to capture business expectations.
The BOI rose from negative 1.22 percentage points in the first quarter of the year to plus 2.66 percentage points in the second quarter. On a year-on-year basis, the index increased marginally from plus 0.89 percentage points in the second quarter of 2016 to plus 2.66 percentage points in the second quarter of this year.
The services sector led the way, with five indicators in the expansionary region for the second quarter. This was largely attributed to growth within the information and communications, education, health and social services segments.
Business outlook for the wholesale trade sector also emerged as one of the most optimistic sectors for the second quarter, owing to a pick-up in both electronic and non-electronic export segments. Similarly, sentiments within the manufacturing sector have improved significantly for the second quarter, explained by a strong rebound in overall industrial output in the recent months.
The outlook for the construction sector however deteriorated in the second quarter, with all six indicators moderating downwards. This was largely attributed to a decline in private building projects. Owing to an uptick in forex trading and security trading activities, sentiments within the financial sector have improved slightly from the preceding quarter.
“The uptick in business sentiments was led mainly by a surge in both wholesale trade and manufacturing activities in the recent months. The unprecedented surge in optimism within the wholesale trade sector reflects a recovering overall global demand which is expected to provide growth support to our local economy in the coming months,” said Audrey Chia, SCCB’s CEO, in a press statement.
“While the recent measures announced in Budget 2017 such as the extension of both wage credit scheme and corporate income tax rebates may provide some relief from rising cost pressures, we observed that the majority of new measures are aimed at supporting the internationalisation plans and enhancing the technological capabilities of local firms. We expect such measures to benefit mainly larger-sized SMEs with growth plans in Singapore. It remains to be seen whether such measures have discernible impact on smaller-sized, cash-strapped SMEs in the near term,” added Ms Chia.