Singapore hit with sharp 17-point drop in local business sentiment in Q3: report

The Asia Business Sentiment Index saw its steepest decline in 3 years.

Business sentiment among Asia's top companies fell sharply in the third quarter, weighed down by worries about China's slowing economy, a possible end to the U.S. Federal Reserve's stimulus policy and a decline in the outlook for regional economic hubs like Singapore, a Thomson Reuters/INSEAD survey revealed today.

The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 66 in the third quarter from 74 in the previous quarter, its steepest decline in three years. A reading above 50 indicates an overall positive outlook.

Singapore turned in a third-quarter reading of 50, a sharp drop from the previous quarter's score of 67.

According to Frederic Neumann, co-head of Asian economic research at HSBC, "While growth is still robust across Asia, businesses are grappling with a number of challenges, including worries about rising interest rates as the Fed begins to press the brakes.”

Slowing growth in China, however, weakened overall business sentiment in the third quarter. All companies polled from China were neutral about their outlook and most listed global economic uncertainty as their greatest risk.

Apart from China, sentiment in South Korea and Singapore also slipped to neutral from positive in the second quarter. Taiwan was the only country in the region in negative territory with a score of 33.