Businesses optimistic about Q3 growth outlook: Survey

BUSINESSES in Singapore remain upbeat about growth prospects over the next three months, a study released yesterday showed. Business information provider Dun & Bradstreet (D&B) Singapore's latest Business Optimism Index, conducted every quarter, showed that the percentage of companies expecting higher profits and sales volumes has risen over the previous quarter.

Each quarter, 200 business owners and senior executives representing major industry sectors are surveyed on six indicators of optimism: expectations of upcoming quarterly sales, profits, employment, new orders, inventories and selling prices.

The survey showed a positive "net optimism index" of 18.3 percentage points for both sales volume and net profits in the third quarter. The index is obtained by subtracting the percentage of pessimistic firms from the percentage of optimistic firms.

This shows an improvement in both measures over the previous quarter - the "optimism level" for volume of sales was at 17.5 percentage points for the second quarter, while that for net profits was at 11.6 percentage points.

Survey respondents had more muted expectations on the other measures of optimism, however.

Inventory levels for firms are expected to increase at a slower rate, as "net optimism" fell from 5.9 percentage points in the second quarter to 2.5 percentage points in the third quarter.

More manufacturers are also anticipating a slowdown in new orders, with the index declining from 50 percentage points to 25 percentage points.

Respondents from the services sector were the most optimistic, with all indicators coming out positive. Both the manufacturing and construction sectors tied in second place, with four indicators in the expansionary region.

"Business confidence will remain healthy for the third quarter. But the temporary repercussions of the haze situation will have slightly dampened the outlook," said chief executive of D&B Singapore Audrey Chia.

Source: Straits Times, 3 Jul 2013