Long-time high: Businesses giddy to rake in profits in 2H14

But two sectors are doubting.

Over the past year, businesses have been conservative in estimating their outlook, with net weighted balance ranging only from 5 to 9% of firms. This time however, 13% of firms is optimistic about business prospects for the six months ending Dec 2014.

According to a release by SingStat, 71% of firms foresee the business climate to remain the same for the next six months, compared with the previous six. A weighted 21% of firms is optimistic about prospects, compared to only 15% previously. Meanwhile, 8% feel business will deteriorate, the lowest percentage since July 2013.

Within the services sector, all industries registered positive net weighted balances except for F&B (-5%) and real estate (-23%).

Here’s more from SingStat:

A net weighted balance of 37% of firms in the accommodation industry expects better business prospects for the six-month period ending Dec 2014. Hotels expect a higher volume of business due to the upcoming Formula One night race.

Similarly, firms in the financial & insurance industry are optimistic in their business outlook. A net
weighted balance of 25% of firms foresees the business climate to improve in the coming six months. In particular, banks cited the gradual global economic recovery as the reason for their positive outlook.

On the other hand, a net weighted balance of 5% of firms in the food & beverage services industry expects less favourable business conditions for Jul-Dec 2014. Restaurants cited the shortage of labour as the key factor adversely affecting their business outlook.

Firms in the real estate industry continue to expect slower business in the coming months. A
net weighted balance of 23% of firms in the real estate industry predicts a lower level of business
activity for the second half of 2014. The series of government measures implemented including the Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR), continue to be the reasons cited by real estate developers for their negative outlook.

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