Businesses upbeat for Q2, reversing Q1's downtrend

Businesses upbeat for Q2, reversing Q1's downtrend
PHOTO: Businesses upbeat for Q2, reversing Q1's downtrend

SINGAPORE - Local business leaders are more upbeat about the local economy, with the latest study showing that optimism among local businesses has improved for the second quarter of 2013, reversing a downward trend seen in the first three months of this year.

According to Dun & Bradstreet (D&B) Singapore's latest Business Optimism Index (BOI) study, all 6 leading business indicators have risen into the expansionary region for the second quarter of 2013, a marked contrast from the previous quarter with only 2 of 6 leading business indicators in the expansionary region.

For the second quarter, strong increases were seen in volume of sales, net profits and employment levels with optimism levels in volume of sales soaring most from -5.1 percentage points to 17.5 percentage points.

Employment expectations ranked second as optimism levels climbed from 5.8 percentage points to 15.5 percentage points. Net profits have also moved into the expansionary region from -1.6 percentage points to 11.6 percentage points.

Meanwhile, inventory levels and selling prices have reported modest increases, at 5.9 percentage points and 0.9 percentage points respectively. New orders for the manufacturing sector are likely to increase by 50 percentage points this quarter.

Local businesses in the services sector were the most optimistic with an increase seen across all 5 leading business indicators. Of the 5 indicators, the services sector scored well in expected volume of sales, net profits, selling prices and employment levels at 25.7 percentage points, 20 percentage points, 17.1 percentage points and 14.3 percentage points respectively. Inventory levels have also risen to 5.7 percentage points.

The stronger showing follows reports of higher business receipts and growth within the sector, particularly in the area of information and communications and education services. Recent reports of an increase in tourist arrivals have also contributed to positive sentiments within the sector

"Growing strength in the jobs landscape has certainly contributed to the improved levels in optimism here. The recent announcement made in Budget 2013 is a further testament to the government's relentless focus on raising productivities by adopting a sectoral and targeted approach. This bodes well for business leaders in Singapore as the new strategies and measures will help cushion the impact of rising business costs to some extent," said Audrey Chia, D&B Singapore's chief executive officer.

Compared to a year ago, optimism levels have also improved across the board with 5 of 6 leading indicators in the expansion region. According to the analysis, year-on-year volume of sales, employment and net profits have increased to 21.5 percentage points, 9.2 percentage points and 4.3 percentage points respectively. New orders for the manufacturing sector have also increased to 25 percentage points.

This is the 16th D&B Singapore Business Optimism Index (BOI) released with the first issue released in July 2009. Conducted quarterly with 200 business owners and senior executives representing major industry sectors across Singapore, the D&B Business Optimism Index (BOI) is a measure of business confidence in the economy. Respondents are asked if they expect increases, decreases or no changes in their upcoming quarterly sales, profits, employment, new orders, inventories and selling prices.


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