June 14, 2023
SINGAPORE – Local business sentiment hit a two-year low for the third quarter of 2023, amid a worsening outlook for the manufacturing and wholesale sectors.
Data from the Singapore Commercial Credit Bureau (SCCB) released on Monday showed its quarterly Business Optimism Index falling to 3.98 percentage points for the third quarter of 2023, from 4.6 percentage points in the previous quarter and 5.1 percentage points in the third quarter of 2022.
“The overall sentiment among the business community has been on a gradual downtrend over the past six quarters, since the second quarter of 2022,” said SCCB chief executive Audrey Chia.
“Given the downside risks in global financial conditions, ongoing geopolitical developments and sluggish demand from China, we expect sentiment to remain dampened moving into the second half of the year,” she said.
Similar to the second quarter, five out of six indicators remained expansionary.
These indicators were volume of sales, net profit, selling prices, new orders, inventory levels and employment.
Three of the six indicators deteriorated on a quarter-on-quarter basis.
In the third quarter, selling prices fell to 11.19 percentage points from 14.18 percentage points in the second quarter, while new orders fell to 4.48 percentage points from 8.96 percentage points.
Employment levels also dropped to 4.48 percentage points in the third quarter, from 7.46 percentage points in the previous quarter.
Meanwhile, the volume of sales rose to 2.99 percentage points from 1.49 percentage points, and net profits increased to 2.99 percentage points from 0 percentage point.
Inventory levels remained contractionary, at minus 2.24 percentage points in the third quarter from minus 4.48 percentage points in the second quarter.
Year on year, the volume of sales, net profit and selling prices were up.
However, new orders and employment levels decreased. Inventory levels remained contractionary.
Business sentiment was upbeat within the construction and financial sectors, with all six indicators in positive territory.
The services and transportation sectors were mostly optimistic too, with five of six positive indicators.
Business confidence among manufacturers, however, deteriorated, with only two of six indicators in positive territory. Similarly, the wholesale sector remained weak, with half its indicators in negative territory. THE BUSINESS TIMES