Overall outlook is barely positive in Q2.
Local business confidence booked a steep year-on-year crash in the second quarter, according to the Singapore Commercial Credit Bureau (SCCB)’s latest quarterly Business Optimism Index (BOI).
On a year-on-year basis, BOI fell from +9.0 percentage points in the second quarter last year to just +0.89 percentage points in Q2 2016. On a quarter-on-quarter basis, however, this represents a marked improvement from a record low of -2.93 points in Q1.
Four out of six business indicators were negative in 2Q16, compared to just two out of six in the same period last year.
In 2Q16, both volume of sales and net profits fell severely and crashed into negative territory. Meanwhile, selling price slipped into contraction levels from marginally positive territory. Employment levels also dropped sharply in the second quarter.
The only indicators which were positive this quarter are inventory levels and new orders. Inventory levela rose from -3.57 percentage points in Q2 2015 to +6.0 percentage points in Q2 2016, while new orders for manufacturers climbed from -8.70 percentage points in Q2 2015 to 0 percentage points in Q2 2016.
“With the lacklustre global economic growth posing a drag on the local economy, the outlook for the business community will remain subdued in the coming months. It is quite unlikely we will see any significant improvement in the BOI anytime soon. For Q2, the services industry, in particular, has anticipated cautious optimism for the second quarter ahead due largely to the effects of weaker demand following brisk festive sales during the months before.” commented Ms. Audrey Chia, SCCB’s Chief Executive Officer.
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