Services sector's business outlook recovers in Q2

One in 5 firms in the services sector is optimistic about business conditions in 2018.

The services sector’s business outlook has improved significantly over a year. The Department of Statistics revealed that 8% of firms expect more favourable business conditions for the period of April to September 2018 (Q2), higher than the -1% recorded over the same period last year.

A weighted 17% of firms are optimistic about business conditions whilst a weighted 9% of firms foresees slower business. Meanwhile, the majority of firms (a weighted 74%) anticipate the level of business activity to remain the same.

Within the services sector, the financial & insurance, wholesale trade, and real estate industries are amongst those which foresee more favourable business conditions. Retail trade, accommodation, and food & beverage services industries are less optimistic about their business outlook.

SingStat noted that financial & insurance firms are optimistic in their business outlook for the next six months, particularly banks and insurance firms, as “they foresee an improvement in the global economic conditions.”

About 8% of services firms expect operating receipts to increase. Companies in the recreation, community & personal services are the most optimistic in their revenue outlook. They were followed by healthcare providers, financial firms, and transport businesses.

Meanwhile, firms in the accommodation, retail trade, and food & beverage services industries expect lower turnover.

Only 3% of firms in the services sector expect to increase hiring activity. Those in the financial & insurance, business services, and recreation, community & personal services industries expect to increase hiring in Q2, whilst those in the accommodation and retail trade industries expect to hire less as they foresee slower business activities in the next three months.