85% of Singaporeans expect economy to deteriorate in the next six months

Survey says Singaporeans are the most pessimistic in Asia.

According to a release, a sense of pessimism dominates findings from the latest Ernst & Young’s bi-annual Southeast Asian (SEA) issue of the Global Capital Confidence Barometer released. The survey of more than 1,500 senior executives in 41 countries around the world, of which 118 were from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand and Vietnam), was conducted in August and September 2012.

For the first time in two years, SEA respondents, who have consistently held a bullish view of both the global and local economies, expressed little confidence in the immediate prospects of global recovery. More than half (54%) of SEA respondents thought that the global economy was declining, up from 42% who held such sentiments six months ago.

The most pessimistic views about the global economy came from Singapore respondents: none saw any signs of improvement compared to 24% six months ago. Also, an overwhelming 85% of Singapore respondents thought that the global economy was going to deteriorate over the next six months. Overall, 65% of the SEA respondents expect the global economic volatility to continue for more than a year.

Views of local economies were more promising. 42% of the SEA respondents indicated that their local economies were stable, up from 24% six months ago. Still, the proportion of respondents who thought that their local economy was improving dropped from 54% as of six months ago to 36% presently. Those based out of Indonesia were most confident in their local economy, while those in Singapore were least so.

Harsha Basnayake, Transaction Advisory Services Leader for Southeast Asia and Singapore at Ernst & Young says:

“The results reflect the current mood among corporate decision-makers in Southeast Asia. For the first time in two years, we are seeing the sense of bullishness that has been there making way and the dominating sentiment now is stability. Corporates in our markets continue to see Southeast Asia as a stable geography to do business, but there is a lot more concern about revenue and margin pressures and the importance of smart capital allocation given the uncertainties.”

48% and 61% of SEA and Singapore respondents respectively felt that revenue and margin pressure is the most significant business challenge facing their companies.