Business optimism hits another historical low in 4 years

Wholesale trade emerged as one of the most pessimistic sectors.

Local firms in Singapore seemed to be losing hope as Business Optimism Index plunges to its second lowest historical low in four years, Singapore Commercial Credit Bureau (SCCB) revealed.

According to SCCB, the index slipped from +2.87 percentage points in Q4 2016 to -1.22 percentage points in Q1 2017. On a year-on-year (y-o-y) basis, BOI has improved slightly but remained in the contractionary zone from -2.93 percentage points in Q1 2016 to -1.22 percentage points in Q1 2017.

The bureau revealed that both wholesale trade and financial services sectors emerged as the most pessimistic sectors for 1Q17, with 5 business indicators in the contractionary zone.

Meanwhile, the services was the most optimistic sector with 6 business indicators in the expansionary zone due to an increase in tourist arrivals, sustained improvements in the food and accommodation, information and communications and social services sub-sectors.

However, the bureau noted that compared to 2016, there is a slight increase in firms which have anticipated a reduction in investments for business expansion in 2017.

"The proportion of firms which have expected a decrease in investments for business expansion has risen from 4% in 2016 to 9% in 2017. Meanwhile, the proportion of firms expecting investments to increase remained unchanged at 6 per cent for 2017. Majority of local firms surveyed has anticipated investments to remain unchanged at 85 per cent," SCCB said.