Firms in the services sector worry over sluggish business in 1H13

Only 14% is optimistic.

According to Business Expectations Survey by Department of Statistics, an overall net weighted balance of 5% of firms in the services sector expects less favourable business prospects for the period of Jan - Jun 2013 compared with Jul - Dec 2012. The majority of firms (a weighted 67%) foresee the business climate to remain unchanged for the first half of 2013.

A weighted 14% of firms is optimistic about business prospects, while a weighted 19% of firms projects slower business. In comparison, the previous survey recorded a positive net weighted balance of 1% for Oct 2012 - Mar 2013.

Compared to the same period last year, the negative net weighted balance of 5% was smaller than the negative net weighted balance of 25% recorded for Jan - Jun 2012.

Business conditions in the wholesale trade industry are expected to remain stable for the period of Jan - Jun 2013, with different firms in the industry expressing mixed sentiments.

Firms with positive sentiments are mainly engaged in the wholesale of food & beverages and chemicals & chemical products. On the other hand, wholesalers of household electrical appliances are less optimistic.

A net weighted balance of 15% of firms in the retail trade industry is less optimistic in their business outlook for the six-month period ending Jun 2013. In particular, retailers of motor vehicles express concern over the reduction in the Certificate of Entitlement (COE) quota.

In the transport & storage industry, a net weighted balance of 11% of firms expects less favourable business conditions in the first half of 2013. In particular, shipping lines as well as firms providing air transport services and freight forwarding, packing & crating services are among those that foresee slower business in the coming months.

The accommodation industry predicts a decline in business with a net weighted balance of 27% of firms anticipating slower business for Jan - Jun 2013 as compared to Jul - Dec 2012. Similarly, after experiencing brisk business during the year-end holidays and festive season, a net weighted balance of 21% of firms in the food and beverage services industry expects less favourable business conditions for the six-month period ending Jun 2013.

The majority of firms in the information & communications industry (a weighted 77%) foresee demand for their services to remain at a similar level for the first half of 2013.
In the financial and insurance industry, firms predict that the business outlook will remain stable.

An overall net weighted balance of 41% of firms in the real estate industry expects the business situation to deteriorate for the six-month period ending Jun 2013. Within the industry, real estate developers and real estate agents foresee lower levels of business activity in the coming months in view of the new cooling measures.

Firms in both the business services (excluding real estate) and recreation, community & personal services industries expect business to remain stable for the first half of 2013.