Businesses turn bullish for Q1 2020

Local firms have positive outlook for five in six indicators.

Local firms has become more optimistic for the upcoming quarter, with the Business Optimism Index (BOI) rising +5.31 ppt for Q1 2020, compared to +4.82 ppt from the previous quarter, according to a study by Singapore Commercial Credit Bureau (SCCB).

However, business sentiment is still low compared to the +7.19 ppt from Q1 2018.

Also read: Local business confidence sours in Q4

As with the previous quarter, five of the six indicators for business optimism are expansionary for Q1. On a QoQ basis, sentiments for volume of sales and net profits rose to +4.88 ppt and +4.44 ppt respectively, and selling price rebounded sharply to +8.96 ppt from -3.33 ppt.

However, those for new orders and employment levels fell to +3.98 ppt and +2.99 ppt respectively, and inventory levels sank to negative region at -0.5 ppt.

The services sector emerged as the most optimistic for the quarter, showing positive indices amongst all six indicators. Sentiments on net profit for the sector surged from zero to +54.84 ppt. Although employment levels fell, sales volume, new orders, inventory and selling price rose.

The financial sector is also optimistic for five indicators, particularly on the volume of sales, net profit, selling price, new orders and inventory levels. Its outlook for employment levels, however, is at zero ppt.

In contrast, the optimism in the transportation sector moderated with only half of its indicators in the positive region. This includes volume of sales, net profits and selling price. Only the volume of sales and selling price became increasingly optimistic in outlook.