Services sector remain optimistic for July to December

A net weighted balance of 11% of the firms gives a “favourable business outlook” expectation. 

The services sector remains positive on their business outlook for the second half of 2021, with one industry expecting to recover with the rollout of the vaccination programme, according to the 3rd Quarter Business Expectations Survey by the Department of Statistics.

Of the 1,500 enterprises covered, 20% of the firms were optimistic about their business conditions, whilst 9% were seeing slower business conditions. This resulted in a net weighted balance of 11% of firms predicting a more favourable business outlook from July to December.  

This is similar to the net weighted balance in the previous quarter of 11% of firms seeing a positive outlook for the months of April to September.

Most of the industries including wholesale trade, retail trade, transportation and storage, accommodation, information and communications, finance and insurance, professional service and recreation, community and personal services were expecting improved business conditions for July to December. 

Firms in the wholesale trade industry are “upbeat” with a net weighted balance of 26%, as wholesalers of petroleum products and machinery equipment anticipate better business due to recovery of global trade with the vaccination rollout.

On the other hand, the firms in the food and beverage services industry, real estate, and administrative and support services were expecting business conditions moving forward, with the food and business industry (-9%) seeing slower business due to dine-in restriction and expectation that demand may not recover immediately after the end of Phase 2 (Heightened Alert) restrictions.

The real estate industry (-8%), particularly firms engaged in the rental of retail premises expect “downward pressure” on rental rates due to weaker demand for them.

The services sector was also seeing higher revenue for the third quarter with a net weighted balance of 9% of the firms, and they also expect an increase in hiring for the same quarter with a net weighted balance of 3%.

The survey was conducted from June to July.