Business sentiment among local firms have moderated slightly for the 2Q2022, says Singapore Commercial Credit Bureau (SCCB), a subsidiary under Credit Bureau Asia (CBA) on March 15.
According to SCCB, the business optimism index (BOI) dipped 0.56 percentage points q-o-q to 5.35 percentage points in the quarter, down from the 5.91 percentage points in the 1Q2022.
On a y-o-y basis, the second quarter’s BOI rebounded 1.41 percentage points from the 3.91 percentage points seen in the 2Q2021.
The BOI, which is released quarterly, is a measure of business confidence in the economy. The index captures the responses of some 200 business owners and senior executives and tracks their confidence in the economy.
Five of six indicators were expansionary during the quarter, same as that of the previous quarter.
On a y-o-y basis, three of six indicators improved in the 2Q2022. Selling price rose from 1.53 percentage points to 5.22 percentage points, while inventory levels surged from -7.64 percentage points to -1.49 percentage points. Employment levels spiked from 0 percentage points in 2Q2021 to +11.94 percentage points in 2Q2022.
See also: How will the Fed rate cuts affect me?
Conversely, volume of sales and net profits saw a sharp decline from +9.92 percentage points in 2Q2021 to +2.99 percentage points in 2Q2022. New orders dropped from +9.92 percentage points in the quarter the year before to +5.22 percentage points in 2Q2022.
On a q-o-q basis, only one of six indicators saw an improvement. During the 2Q2022, selling price increased from +3.73 percentage points in 1Q2022 to +5.22 percentage points in 2Q2022.
Sectoral outlook
See also: MAS set to hold monetary policy as inflation persists
The outlook for the financial and manufacturing sectors were the most optimistic, with all six indicators in positive territory.
On the other hand, the mining sector was found to be the most downbeat for the quarter, with all indicators in negative territory
Services and transportation saw four and three indicators in positive territory, while construction saw two positive indicators in the 2Q2022.
The wholesale sector remained “lukewarm” with most of the indicators unchanged.
Audrey Chia, SCCB’s chief executive officer (CEO) explains that the slight moderation in the quarter came about due to the geopolitical uncertainties from the Russia-Ukraine conflict.
“[The conflict] has posed significant downside risks in global supply chains in the short to medium-term,” says Chia.
“Global supply chains are already in a fragile state since the start of the pandemic and may exacerbate further with these ongoing developments,” she adds. “However, growth prospects for domestically-oriented sectors remain strong with the progressive easing of safe management measures and travel restrictions. Hence, we expect the overall outlook of firms to remain cautiously optimistic in the next quarter.”
Photo: Stock image
