Services sector outlook remains ‘positive’

The net weighted balance of 9%, however, was lower than the previous quarter.

Around 23% of Singaporean firms are optimistic about the business conditions for October 2022 to March 2023, whilst 14% expect business conditions to deteriorate, resulting in a net weighted balance of 9% of firms anticipating a more favourable outlook.

In the Fourth Quarter of 2022 data, the Department of Statistics showed that around 63% of the firms expected the business condition to be the same.

The department, however, said the net weighted balance is lower than the 15% recorded in the third quarter, and 19% in the same period last year. 

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Most of the industries in the services sector are positive about business conditions. Businesses in the food and beverage services and accommodation sectors are the most positive forecast with a net weighted balance of 63% and 48%, respectively.

They are followed by recreation, community and personal services (34%, retail trade (31%), professional services (30%), transportation and storage (15%), information and communication (10%), finance and insurance (4%), and administrative and support services (1%).

The retail and trade and food & beverage sectors are expected the conditions to improve due to the year-end festive session, with apparel and footwear, and restaurant retailers expecting better conditions.

The transportation & storage, and accommodation sectors are also seeing a positive outlook due to the recovery of international travel and an increase in tourist arrivals.

However, the wholesale trade and real estate industries have a dimmer forecast with a net weighted balance of -10%, and -5%, respectively. 

Wholesalers, particularly of computers, computer peripheral equipment and software cited the declining demand for computers, whilst the real estate industry traced their sentiment to the latest round of cooling measures, along with the rising interest rates.

For the operating revenue forecast from October to December 2022, 21% of the firms are expecting to see increases and 13% were anticipating declines, with a net weighted balance of 8%. 

The services sector was expecting growth in hiring activity during the last three months, with a net weighted balance of 15%