Transportation, construction sectors outlook remains bleak for Q3: study

The financial sector is the most optimistic for the third quarter.

The transportation and construction sectors outlook for Q3 remain bleak according to a study by Singapore Commercial Credit Bureau (SCCB).

In its Optimism Index of Business Indicators, the SCCB placed the transportation sector as the weakest with five of its six indicators in the negatives.

Volume of sales, net profit and selling price remained at -18.18 percentage points in Q3 2021. New orders fell from 0 percentage point in Q2 2021 to -9.09 percentage points and employment levels remained contractionary at -9.09 percentage points in Q3 2021. However, inventory levels moderated from +9.09 percentage points in Q2 2021 to 0 percentage points in Q3 2021.

Meanwhile, the construction sector has four out of six of its indicators in the contractionary zone. Both volume of sales and net profit deteriorated from -8.33 percentage points in Q2 2021 to -16.67 percentage points. Employment levels fell further from -16.67 percentage points in Q2 2021 to -25.0 percentage points in Q3 2021.

Inventory levels increased but remained in the negative from -33.33 percentage points in Q2 2021 to -16.67 percentage points in Q3 2021.

Out of all the sectors, the financial sector’s outlook is the most optimistic with six out of six indicators in the positive zone.

Both volume of sales and net profit remained expansionary at 36.36 percentage points in Q3 2021 whilst new orders climbed from 27.27 percentage points in Q2 2021 to 36.36 percentage points in Q3 2021.

Employment levels also rose from 36.36 percentage points in Q2 2021 to 45.45 percentage points in Q3 2021.

SCCB chief executive officer Audrey Chia said that they expect sentiments amongst local businesses to remain cautiously optimistic in Q3 following a rebound in the previous quarter. She added that because of the recent tightening of measures outlook for certain sectors are further dampening.

“Given the lingering uncertainties in the pandemic both locally and globally, we foresee the outlook to remain mixed and uneven across different sectors. Moving into Q3, firms will have to brace themselves for more downside risks ahead,” Chia said.