According to the quarterly Business Expectations Survey conducted by the Singapore Department of Statistics (SingStat), firms in the services sector remain positive on their business outlook for the next six months.
Findings from the 3Q survey indicate that 20% of firms are optimistic about the business conditions while 9% of firms foresee slower business conditions, resulting in a net weighted balance of 11% of firms predicting a more favourable business outlook for the period between July to December.
This is similar to the net weighted balance recorded in the previous quarter.
Within the services sector, most industries including wholesale trade, finance & insurance, transportation & storage and information & communications expect business conditions to improve for the period between July to December as compared with the period between January to June. On the other hand, food & beverage services and real estate industries expect weaker business conditions ahead.
Firms within the wholesale trade industry are upbeat about the business conditions for the period of July to December compared to the preceding six months. Wholesalers of petroleum & petroleum products and machinery & equipment are optimistic about their business outlook as they expect better business due to the recovery of global trade with the roll-out of the COVID-19 vaccination programme.
The finance & insurance industry foresees the business situation to be more favourable in the coming months. Banks and insurance companies as well as firms engaged in payment processing services are among those that are positive about their business outlook.
Similarly, firms in the transportation & storage industry are optimistic about business conditions for the next six months. Within the industry, water transport firms expect higher demand for their services in the coming months.
For the information & communications industry, firms are positive about their business outlook for the next six months. In particular, software publishers are upbeat on their business prospects.
Conversely, firms in the food & beverage services industry expect less favourable business conditions in the coming months. They foresee slower business as a result of dine-in restrictions and in anticipation that demand may not recover immediately after the end of Phase 2 (Heightened Alert).
See also: Singapore's consumer price index grows across all household income groups in 1H2021
The real estate industry likewise foresees weaker business conditions for the next 6 months. In particular, firms engaged in the rental of retail premises expect downward pressure on rental rates due to weaker demand for such spaces.
The services sector, with a net weighted balance of 9% of firms, foresees higher revenue for the period of July to September compared with the April to June period.
Firms in the wholesale trade industry expect operating receipts to increase in the next three months ending September, in anticipation of higher demand due to the recovery of global trade.
In contrast, the administrative & support services industry expects lower turnover in the next quarter. Within the industry, travel agencies and security firms are among those which expect lower sales in the next three months.
In terms of employment, the services sector expects an increase in hiring for the period between July to September, with a net weighted balance of 3%.
In line with their positive business outlook, the wholesale trade and finance & insurance industries expect to increase hiring as they foresee business conditions to improve with increased vaccination rates for COVID-19 globally.
On the other hand, firms in the administrative & support services industry expect lower employment levels in the third quarter of 2021 in view of lower demand for their services.
Photo: Bloomberg
