SINGAPORE (July 31): Companies in the services sector are slightly less optimistic about business conditions in the second half of 2019, according to data released on Wednesday by the Singapore Department of Statistics.
The dampened spirits are led by firms in the retail trade industry, which foresee a less favourable business situation in the next six months.
At the same time, wholesalers as well as banks and finance companies also expect the ongoing trade conflict between US and China to have a negative impact on their businesses.
On the other hand, firms in the accommodation and food & beverage services industries are most optimistic in their business outlook for 2H19 on the back of the year-end festive season.
Hoteliers will also be expecting a boom in visitor arrivals as well room occupancy due to the upcoming Formula One night race in September, which has historically attracted tourists from around the globe.
Some 14% of firms in the services sector are more optimistic about business conditions between July and December 2019, while 12% of firms expect slower business.
This brings the net weighted balance of firms predicting a more favourable outlook in 2H19 to 2% -- weaker than the 9% recorded for the same period last year.
Meanwhile, 74% of the firms surveyed maintain their business outlook for the coming months.
The data aggregates the responses of 1,500 businesses across sectors such as trade, transport and storage services, accommodation, food and beverage services, information and communications, financial and insurance services, real estate, and community services.
Similar data released by the Economic Development Board (EDB) for manufacturing firms showed that 11% expect poorer business conditions for the rest of the year. This is down from the 1% recorded for April to September.
Bright spots in the manufacturing sector are biomedical manufacturing and general manufacturing, which expect growths of 6% and 4% respectively.
However, this is dragged by precision engineering, electronics and chemicals, which foresee declines of 31%, 27% and 21%, respectively.
The data for both the services and manufacturing sectors are in line with current macroeconomic conditions.
With advance estimates of 2Q19 GDP being nearly nil at 0.1%, market watchers and economists expect the second half of 2019 to present similar growth figures.
