Services firms amongst the most optimistic for Q2

While the sentiments for the construction sector deteriorated.

Business sentiments have rebounded into optimism for the second quarter of the year, following a gloomy outlook in the preceding quarter.

According to Singapore Commercial Credit Bureau (SCCB)’s latest quarterly Business Optimism Index (BOI) study, BOI rose slightly from -1.22 percentage points in Q1 2017 to +2.66 percentage points in Q2 2017. On a year-on-year (y-o-y) basis, BOI has increased marginally from +0.89 percentage points in Q2 2016 to +2.66 percentage points in Q2 2017.

Both services and wholesale trade sectors have emerged as the most optimistic sectors for Q2 2017 with 5 business indicators in the expansionary zone. Meanwhile, sentiments within the manufacturing sector have improved significantly with visible increases seen in 5 indicators. The outlook for the construction sector has deteriorated in Q2 2017 with all six business indicators moderating downwards.

“The uptick in business sentiments was led mainly by a surge in both wholesale trade and manufacturing activities in the recent months. The unprecedented surge in optimism within the wholesale trade sector reflects a recovering overall global demand which is expected to provide growth support to our local economy in the coming months. For the second quarter of 2017, optimism levels for the majority of indicators for the wholesale trade and manufacturing sectors have displayed the most significant improvements.” commented Audrey Chia, SCCB’s Chief Executive Officer. 

Here's more from SCCB:

Services

As with Q1 2017, the services sector emerged as the most optimistic sectors with 5 indicators in the expansionary region for Q2 2017. This was largely attributed to growth within the information and communications, education, health and social services segments. Following a moderation in the preceding quarter, SCCB notes that 5 of six indicators have improved visibly for Q2 2017.

Wholesale Trade

The wholesale trade sector has also emerged as one of the most optimistic sectors for Q2 2017 with 5 indicators in the positive territory owing to a pick-up in both electronic and non-electronic export segments.

Manufacturing

Sentiments within the manufacturing sector have improved significantly for Q2 2017 with visible increases seen in 5 indicators. This is due to a strong rebound in overall industrial output in the recent months.

Construction
The outlook for the construction sector has deteriorated in Q2 2017 with all six indicators moderating downwards. SCCB notes that 3 indicators were in the contractionary region as opposed to 2 indicators in Q1 2017. This was largely attributed to a decline in private building projects.

Financial
Owing to an uptick in forex trading and security trading activities, sentiments within the financial sector have made slight improvements from the preceding quarter. According to SCCB, 5 of six indicators have moderated upwards with only 2 of the indicators remaining in negative territory as compared to 5 contractionary indicators in Q1 2017.