Business sentiment among local firms remains weak

Confidence among local firms remains down with modest expectations for the second quarter.

A quarterly index that measures business confidence indicates that optimism is muted.

The score of +7.19 percentage points for the first quarter of this year has slipped to +5.08 percentage points for the second.

That is also well down on the +8.50 percentage points recorded for the second quarter last year.

The figures come from a survey of 200 business owners and senior executives by the Singapore Commercial Credit Bureau (SCCB) and were released yesterday. The numbers are crunched to yield the net percentage of respondents expecting improvements in the coming quarter, compared with the same period last year.

Financial and service sectors have emerged as the most optimistic sectors for the second quarter, thanks largely to robust demand in the insurance area, the SCCB said.

Expectations for construction continue to lift with three indicators - sales volume, inventory levels and jobs - in positive territory.

But the manufacturing and wholesale sectors indicate increased pessimism.

The SCCB noted that manufacturing gloom is due in part to an expected slowdown in electronics and precision engineering. Likewise, sentiment in the wholesale sector took a turn for the worse on the back of a weaker performance in the wholesale trade of machinery and equipment.

SCCB chief executive Audrey Chia said: "The moderation in business sentiment for the next quarter should come as no surprise in light of weaker external demand, which has impacted both wholesale trade and manufacturing sectors." - THE STRAITS TIMES