SINGAPORE - Business confidence in Singapore is relatively low, with business leaders here believing that the global economy is worsening.
Many of the Singapore respondents, among the 2,500 finance professionals, senior managers and directors polled in a global survey, said that they were encouraged by government initiatives to boost growth, but were concerned about the recent policy to tighten the labour market to foreigners.
The survey was the 15th edition of the quarterly Global Economic Conditions Survey (GECS), undertaken by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
The results, released yesterday, indicated that only 11 per cent of the Singapore respondents reported confidence gains, 53 per cent reported a loss of confidence.
Leong Soo Yee, head of ACCA Singapore, said: "Perceptions of the recovery were mixed, with 23 per cent of respondents here believing the global economic recovery was still on track, while 68 per cent of respondents felt that the global economy was either deteriorating or stagnating."
But he added that respondents here believed, on balance, that the government's programme of fiscal stimulus launched in the past year would support growth.
The Singapore respondents who expressed concern that the government's recent move to restrict foreign workers' access to the market here said that it would restrict businesses.
One respondent said that Singapore's openness to employing skilled foreigners, while unpopular with the electorate, has benefited the local economy and will continue to do so.
The survey reported that Singapore's open economy has continued to shrink from the slowdown in China and the continued uncertainty in Europe and the US.
It added that the Singapore government's policies - including support for businesses trying to increase productivity and attract Foreign Direct Investment - had been greeted with enthusiasm.
Globally, confidence in the global economy fell in the third quarter of this year.
Of the global sample of respondents, 67 per cent said that they now believed the global economy to be stagnating or reversing.
However, further analysis of the findings suggests that this waning of confidence comes almost entirely from changing business fundamentals - such as demand conditions, access to finance, prompt payment and inflation - as opposed to respondents' sentiment.
The global respondents pointed to the continued uncertainty across the Asia-Pacific, which is still feeling the effects of the economic downturn in China; respondents from countries neighbouring China indicated that besides the Chinese downturn, they have also been hit by the persistently sluggish recovery of Western economies.
Manos Schizas, a senior economic analyst with ACCA, the editor of the survey and author of its report, said: "This quarter has seen business confidence fall for all the right reasons. Around the world, with few exceptions, the fundamentals of the business environment are deteriorating, and businesses are once again having the kinds of liquidity problems we thought we had put behind us."
One theme that emerged from the survey is the interconnectedness of the global economy.
Raef Lawson, IMA's vice-president of research, said: "The slowdown in Asia, the eurozone debt crisis, the sluggish US recovery - are all feeding into each other and no region is unaffected."
"In fact, the degree to which movements in the GECS indices are synchronised between regions is uncanny."