Services sector braces for looming threat of bad business

All firms see a negative outlook till March 2012, except for these three sectors.

According to the Department of Statistics, the retail trade, accommodation, and recreation, community & personal services industries are the only ones expecting brisk business in the near term.

An overall net weighted balance of 9% of firms in the services sector is less upbeat about business prospects for the period of Oct 2011 - Mar 2012 compared with Apr - Sep 2011. A weighted 16% of firms expects business to improve while a weighted 25% of the firms foresees a less favourable business outlook. Majority of the firms (a weighted 59%) expect the business situation to remain unchanged for the period. This is in contrast to the positive net weighted balance of 19% recorded for Jul - Dec 2011 in previous quarter’s survey and the positive net weighted balance of 27% registered in the same period of the previous year (i.e. Oct 2010 - Mar 2011).

Wholesale firms expect the level of business activity to remain unchanged for the period of Oct 2011 - Mar 2012 compared with Apr - Sep 2011. A weighted 24% of wholesalers foresees business situation to improve while another weighted 24% of wholesalers anticipates business to decline. Firms with positive sentiments are mainly engaged in the wholesale of food & beverages, industrial machinery & equipment and motor vehicles. On the other hand, wholesalers of computers & accessories and chemicals & chemical products are less optimistic.

A net weighted balance of 23% of firms in the retail trade industry is more upbeat about business prospects for the six-month period ending Mar 2012. In particular, supermarkets and department stores as well as retailers of household electrical appliances, wearing apparel & footwear and cosmetics & toiletries expressed positive sentiments.

For the transport & storage industry, a net weighted balance of 14% of firms is less optimistic about business conditions for the period of Oct 2011 - Mar 2012 compared with Apr - Sep 2011. These include shipping lines as well as firms providing air transport services, supporting services to air transport and freight forwarding, packing & crating services.

The accommodation industry foresees business to improve for the next six months ending Mar 2012. Similarly, a net weighted balance of 51% of firms in the food & beverage industry looks forward to brisk business for the period of Oct 2011 - Mar 2012 compared with Apr - Sep 2011, due mainly to the upcoming year-end festive season and December holidays. Within the information & communications industry, firms expect business conditions to
remain stable for the six-month period ending Mar 2012. 

A net weighted balance of 36% of firms in the financial and insurance industry is less optimistic of the business situation for the next six months ending Mar 2012. In particular, banks, stock, share & bond traders and fund management companies cited uncertainty in the global economic outlook as reason for their less favourable outlook. 

In the real estate industry, a net weighted balance of 35% of the firms is less upbeat about business conditions for the period of Oct 2011 - Mar 2012 compared with Apr - Sep 2011. Real estate developers are among those that foresee lower levels of business activity ahead.

A net weighted balance of 5% of firms within the business services (excluding real estate) industry expects less favourable business situation for the six-month period ending Mar 2012.

In the recreation, community & personal services industry, a net weighted balance of 7% of firms expects business to improve in the coming months.