The business sentiments among local firms are cautiously optimistic for the second straight quarter in 3Q2021, improving slightly from the 2Q2021, according to the Singapore Commercial Credit Bureau (SCCB).
SCCB is a subsidiary under Credit Bureau Asia (CBA), a credit and risk information solutions provider in Southeast Asia.
The outlook for the financial, manufacturing and wholesale sectors remained upbeat while sentiments within the services sectors are mixed. The construction and transportation sectors expect the outlook to remain muted.
The outlook for the financial sector is most optimistic with all six indicators in positive territory, same as the previous quarter.
In its report on June 14, the Business Optimism Index (BOI) inched up marginally to 4.07 percentage points in the 3Q2021 from 3.94 percentage points in the previous quarter.
The BOI is a measure of business confidence in the economy, and released quarterly.
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On a year-on-year (y-o-y) basis, the BOI rebounded from the -5.16 percentage points in the 3Q2020.
In the coming quarter, five of six indicators are expansionary on a y-o-y basis compared to the four indicators in the 2Q2021.
Compared to the 3Q2020, volume of sales jumped from -3.33 percentage points to 7.63 percentage points in the 3Q2021.
Net profits rebounded from -8.89 percentage points in the 3Q2020 to 7.63 percentage points in the 3Q2021.
Selling price increased from -10.0 percentage points in the 3Q2020 to 2.29 percentage points in the 3Q2021.
New orders were up from -4.44 percentage points in the 3Q2020 to 9.92 percentage points in the 3Q2021.
Inventory levels fell from -3.26 percentage points in the 3Q2020 to -6.11 percentage points in the 3Q2021.
Employment levels rose from -3.29 percentage points in the 3Q2020 to 3.05 percentage points in the 3Q2021.
On a quarter-on-quarter (q-o-q) basis, three of six indicators have experienced improvements.
Volume of sales and net profit moderated from 9.92 percentage points in the 2Q2021 to 7.63 percentage points in the 3Q2021.
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Selling price rose 1.53 percentage points in the 2Q2021 to 2.29 percentage points in the 3Q2021.
New orders remained unchanged at 9.92 percentage points in the 3Q2021.
Inventory levels were slightly improved at -6.11 percentage points in the 3Q2021 compared to -7.64 percentage points in 2Q2021.
Employment levels were up from 0 percentage points in the 2Q2021 to 3.05 percentage points in the 3Q2021.
“We expect sentiments among local businesses to remain cautiously optimistic in 3Q2021 following a rebound in the previous quarter. The recent spate of tightening measures and border controls aimed at containing the resurgence in Covid-19 cases domestically have resulted in the further dampening of the outlook for certain sectors such as construction and transportation. Certain segments within the consumer-facing services sector have also experienced a moderation in outlook,” says Audrey Chia, CEO of SCCB.
“Given the lingering uncertainties in the pandemic both locally and globally, we foresee the outlook to remain mixed and uneven across different sectors. Moving into Q3, firms will have to brace themselves for more downside risks ahead.” Chia adds.
Photo: Bloomberg
