They expect net profit to jump 12.5 percentage points from Q1.
Local businesses are more optimistic about their performance in second quarter of the year, according to Singapore Commercial Credit Bureau (SCCB)’s Business Optimism Index (BOI).
Business optimism jumped 8.5 percentage points for Q2 2018, from 4.29 percentage points in Q1 2018.
In line with this, firms are expecting their net profit to grow 12.5 percentage points quarter-on-quarter (qoq) from April to June. Sales volume is also expected to increase 13 percentage points qoq, whilst employment level is seen to climb 10.5 percentage points qoq in Q2 2018.
Businesses in transportation and services sector were found to be the most optimistic for Q2.
Transportation firms project their sales volume and net profits to propel 43.75 percentage points in Q2 2018. The index noted the positive outlook in the transportation sector can be attributed to the growth within the water and air transport segments.
Meanwhile, businesses in the services sector expect their sales volume and net profit to rise 18.57 percentage points in Q2 2018. The index underscored the optimism in the services sector is driven by growth across most services sub-sector including information and communication, business services, accommodation, and food services.
On the other hand, construction sector was found to be the least optimistic. Construction firms expect their volume of sales and net profits to fall from 10 percentage points in Q1 2018 to -9.09 percentage points in Q2 2018.
“We expect the growth outlook to be relatively positive although downside risks will still prevail in 2018. The transportation and service-oriented sectors will be the key pillars of growth for 2018. However, the outlook for the construction sector is expected to remain lacklustre due to muted construction activities in the coming months.” said Audrey Chia, CEO of SCCB.
The construction sector shrank by 8.4% in 2017 due to decline in the private residential and private industrial construction works.
The BOI measures business confidence in the economy based on a business sentiment survey of 200 business owners and senior executive across major industries in Singapore.
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