Local trade confidence deteriorates sharply as global woes mount

Exporters are particularly downbeat.

Singapore firms have become more bearish on their near-term growth prospects in the second half of 2015, according to the latest HSBC Trade Confidence Index.

The Trade Confidence Score for Singapore fell sharply to just 109 points in H2 2015, compared to 135 points in H1. This is below the average Trade Confidence Score for Asia, which was 118.

Less than half of respondents in Singapore now expect trade volumes to increase over the next six months, versus 80% six months ago. 

Moreover, more than a fifth of respondents now expect trade volumes to decline. 

"Sluggish regional trade from a slowing of China, lower commodity demand and prices, reduced consumer activity and currency volatility has weighed on Singapore's economic growth this year," said Joseph Arena, Head of Trade and Receivables Finance, HSBC Singapore.

Although Asia, and China in particular, was still viewed as the most promising region for trade, the number of Singapore firms which were optimistic there fell from 87% to 61%. 

In particular, the number of firms looking to Indonesia as a source of opportunity fell dramatically from 20% to only 3%. 

Singapore firms’ perception of opportunities for business growth in North America were up slightly while firms were notably more upbeat about Europe with 12% of firms citing the region as a promising opportunity for business growth, up from only 3% six months earlier.