Business confidence improves in Q2

The services sector is the most optimistic.

Business sentiments in Singapore have recovered in the second quarter of this year following a pessimistic 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.

Here's more from SCCB:

For Q2 2017, the number of negative indicators have fallen on a quarter-on-quarter (q-o-q) basis. Of the six indicators, 2 indicators were contractionary and 4 were expansionary. This stands in contrast to Q1 2017 with 3 contractionary, 2 expansionary and 1 unchanged indicator

• On a y-o-y basis, 5 of six indicators have displayed signs of improvement for Q2 2017. 
• Volume of sales climbed from -1.99 percentage points in Q2 2016 to -1.41 percentage points in Q2 2017. 
• Net profits increased from -1.33 percentage points in Q2 2016 to -0.47 percentage points in Q2 2017. 
• Selling price rebounded into positive territory from -1.33 percentage points in Q2 2016 to +0.94 percentage points in Q2 2017. 
• New orders jumped from +2.0 percentage points in Q2 2016 to +6.10 percentage points in Q2 2017. 
• Inventory levels moderated downwards from +6.0 percentage points in Q2 2016 to +3.29 percentage points in Q2 2017. 
• Employment levels jumped from 0 percentage point in Q2 2016 to +7.51 percentage points in Q2 2017. 

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. 

• Volume of sales are expected to inch upwards from +3.77 percentage points in Q1 2017 to +4.88 percentage points in Q2 2017.
• Net profits and employment levels are anticipated to rise significantly from +1.89 percentage points in Q1 2017 to +8.54 percentage points in Q2 2017 and from +3.77 percentage points in Q1 2017 to +22.64 percentage points in Q2 2017 respectively.
• Both new orders and inventory are also expected to rise from +9.43 percentage points in Q1 2017 to +18.87 percentage points in Q2 2017 and from +3.77 percentage points in Q1 2017 to +9.43 percentage points in Q2 2017 respectively.
• Meanwhile, selling prices are expected to moderate from +5.66 percentage points in Q1 2017 to 0 percentage point in Q2 2017.