Latest business expectations survey reveals souring services sector outlook

Real estate firms are least optimistic.

The majority of firms in the services sector (a weighted 71%) expect the business situation to remain unchanged for the period of Jan - Jun 2014, according to the government's latest Business Expectations Survey.

A weighted 15% of firms anticipates business to improve while a weighted 14% of firms projects business conditions to deteriorate.

Consequently, a net weighted balance of 1% of firms is optimistic about business prospects for the six-month period ending Jun 2014.

The magnitude of the positive net weighted balance recorded for Jan - Jun 2014 is lower than that of the positive net weighted balance of 8% registered for Oct 2013 - Mar 2014 in the previous quarter's survey.

In comparison, a negative net weighted balance of 5% was registered in the same period of the previous year (i.e. Jan - Jun 2013).

A net weighted balance of 16% of firms in the information & communications industry is upbeat about business prospects for Jan - Jun 2014, particularly firms involved in computer programming and consultancy activities.

This was the positive outlook among the sub-sectors, alongside firms in recreation, community & personal services which showed an equal amount of optimism.

On the opposite end of the outlook spectrum, firms in the real estate industry continue to project slower business in the coming months.

A net weighted balance of 23% of firms in the real estate industry predicts business to slow down in the first half of 2014. Developers continue to cite the series of government measures including the Total Debt Servicing Ratio framework as the reasons for the negative outlook.