S’pore business sentiment moderates further for Q4

SINGAPORE – Local business sentiment continued to decline for the third consecutive quarter as the outlook for the services and wholesale sectors deteriorated slightly in the fourth quarter of 2022.

According to data from the Singapore Commercial Credit Bureau (SCCB) released on Tuesday, its Business Optimism Index fell to 4.98 percentage points for the fourth quarter from 5.1 percentage points in the previous quarter, and from 5.78 percentage points in the same period last year.

Five of six indicators – volume of sales, net profit, selling prices, new orders, inventory levels and employment – remained expansionary for the latest quarter, unchanged from the third quarter.

Three of six indicators saw quarter-on-quarter improvements as compared with only two in the third quarter.

Volume of sales rose to 2.99 percentage points from 2.24; selling prices increased to 9.7 percentage points from 8.96 percentage points, while inventory levels rebounded to 2.24 percentage points from minus 2.24 percentage points in the third quarter.

On the other hand, new orders remained expansionary at 10.45 percentage points, while employment levels moderated slightly to 8.96 percentage points from 9.7 percentage points in the third quarter.

Year on year, two of six indicators improved in the fourth quarter, with selling prices rising to 9.7 percentage points from 0 percentage point previously, and inventory levels rebounding to 2.24 percentage points from minus 5.35 percentage points.

Net profit dropped to 0 percentage point from 9.63 percentage points the previous year, while employment levels fell to 8.96 percentage points from 12.12 percentage points in the fourth quarter of 2021.

New orders dipped slightly to 10.45 percentage points from 10.69 percentage points, and volume of sales moderated strongly to 2.99 percentage points from 7.52 percentage points in the fourth quarter of 2021.

SCCB noted that sentiments within the transportation, financial, manufacturing and construction sectors remain relatively upbeat, with all six indicators for each sector in positive territory.

Outlook for the services sector, however, moderated further – five of six indicators were in positive territory, with inventory levels remaining in the negative zone.

Sentiments within the wholesale sector deteriorated visibly with all six indicators in negative territory, after both volume of sales and net profits fell into the contractionary zone from the previous quarter.

SCCB chief executive Audrey Chia attributed the “overall lukewarm outlook” for local businesses to weakening external demand, escalating geopolitical tensions and an overall slower pace of global growth.

“However, visible improvements were seen in both transportation and construction sectors owing to strong recovery in international air travel and a pickup in consumer-facing services,” said Ms Chia. THE BUSINESS TIMES