Business confidence in Singapore predicted to be hurt by haze

But outlook for sales, profits are healthy.

According to Dun & Bradstreet's latest business optimism index, the outlook for volume of sales and net profits remain upbeat for firms as both indicators have reported an increase to 18.3 percentage points each.

The increase in optimism levels was more noticeable for net profits compared to volume of sales. Last quarter, net optimism level for volume of sales rose to 17.5 percentage points while net profits climbed to 11.6 percentage points.

From a sectoral perspective, the services sector remains the most optimistic with all leading indicators in the expansionary region, as with the previous quarter. This follows robust growth in real estate, financial and business services for the first half of the year.

Both manufacturing and construction sectors are tied in second place with four leading indicators in the expansionary region.

A healthy pipeline of infrastructure investments and public housing projects as well as an increase in pharmaceutical and electronics production have accounted for the positive expectations in both industries.

“Business confidence will remain healthy for the third quarter. But the temporary repercussions of the haze situation will have slightly dampened the outlook as evident from the lower levels of optimism we are seeing this quarter. The coming months will prove to be challenging for businesses here. We can expect firms to be increasingly more conservative in their working capital investments to meet shortterm business responsibilities and to cover rising business costs.” said Ms. Audrey Chia, D&B Singapore’s Chief Executive Officer.