Local companies get bearish on business prospects

The Business Optimism Index dropped from 3.6 ppt to 2.6 ppt.

Business sentiments among local companies have winded down but still remains upbeat.

According to the Singapore Commercial Credit Bureau (SCCB), the Business Optimism Index (BOI) dropped from 3.58 ppt to 2.6ppt QoQ. On a yearly basis, the BOI also fell from a 2.9 ppt in 2016.

Amongst six indicators, four have gone down for Q4 on a QoQ basis.

Volume of sales continued to be in the expansionary zone at +5.3 ppt, but has moved down from +5.5 ppt in Q3.

Amongst the sectors, agriculture is the most upbeat with +20 ppt, followed by transportation with +18.2 ppt, mining with +16.7 ppt, and construction with +10 ppt. The rest are marginally optimistic.

Net profits also fell from +5 ppt to +2.5 ppt.

Financial and transportation sectors remained the most optimistic on profits with +9.1 ppt each, followed by manufacturing with +8 ppt, and services with +3.8 ppt. Meanwhile, the wholesale was the only negative sector with -13.3 ppt, whilst the rest remained unchanged.

Outlook for inventory levels dropped from +2.5 ppt to -5.8 ppt, where none of the sectors were optimistic.

Employment levels also fell from +4 ppt to +3.4 ppt.

For employment levels, wholesale, construction, services, and manufacturing are the most upbeat, whilst mining and finance turned pessimistic.

However, selling price moved up from -1 ppt to +2.9 ppt.

Wholesale, transportation, and services sectors remained upbeat on selling price, whilst mining scored negative.

New orders also inched up slightly from +7 ppt to +7.3 ppt in Q4.

Mining, manufacturing, wholesale, and finance sectors remained optimistic, whilst services remained negative.

SCCB chief executive officer Audrey Chia commented, "We expect that the overall outlook will remain stable for the rest of 2017 given that Singapore’s economy will continue to be supported by robust public finances and the government’s fiscal buffers to further diversify the country’s economic base and keep negative shocks at bay in the near-term."