Bosses optimistic about next six months: Business climate survey

Optimism made a welcome return to the business community late last year on the back of better conditions, according to a new survey.

It found that sales and new orders improved markedly while profits contracted the least since the first quarter of 2015. Bosses were optimistic about the next six months - that's the first time that has been recorded since the second quarter of 2014.

All groups of firms - foreign, local, large and small - saw improved sales in the fourth quarter compared with the previous quarter and the same period a year earlier.The poll consultants said the improvement of sales and new orders to "very low contraction levels" implies that there is likely to be expansion in this quarter.

The improvements in performance caused a rise in optimism among firms, according to The Business Times-Singapore University of Social Sciences (BT-SUSS) Business Climate Survey.

It polled 176 firms in December and January.

Bank of America Merrill Lynch economist Mohamed Faiz Nagutha said: "The turnaround in business sentiment is not surprising. The regional and domestic macro situation has improved dramatically just from a year ago, with above-trend real GDP growth in Singapore expected to continue into 2018-19 by our forecasts."

Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye agreed, but added: "Singapore is handicapped however by manpower constraints and may not be able to capitalise on the upswing in external demand."

Instead, business prospects are probably brighter in the immediate neighbourhood, including Thailand, Indonesia and Malaysia, they said.

The fourth-quarter improvements were thanks to both overseas and domestic activities. Firms saw better performance in both areas, but with overseas business outperforming domestic business across the board. - THE STRAITS TIMES