SCCB – Singapore Commercial Credit Bureau released a survey recently that showed an upward trend for a second consecutive quarter in local business confidence. As per the chief executive of SCCB, Audrey Chia, there will be certain downside risk prevalent during 2018; however, the overall growth outlook is expected to remain positive. She cited service-oriented and transportation sectors as the major factors that will lead the growth in 2018.
On the other hand, she believes that there are fewer chances of growth in the construction sector. This is due to the lacklustre performance expected in this sector in the near future. However, the overall trend is going to remain positive.
This upward trend is due to the jump in the business optimism index. During the first quarter of the year, it was +4.29 percentage points; however, it has surged up to +8.5 percentage points in the second quarter.
If we compare the business optimism index on yearly basis, it has jumped +2.66 percentage points as compared to the 2nd quarter in the last year.
A number of six parameters are used to measure the perception of the business community towards the business community. These parameters also depicts the change in the quarterly index. These parameters include:
- Volume of sales
- Selling prices
- Net profits
- New orders
- Inventory levels
- Employee count
Coming back to the index of the 2nd quarter, 5 of the above-mentioned parameters witnessed a jump, because of these escalations, the quarterly index rose. However, the only parameter that saw a decrease is inventory levels.
Among the sectors that showed the major signs of growth, services and transportation were the most prominent ones. The major reason why service sector witnessed a growth is due to a sustainable rise in different segments such as business services, information and communication, and food services along with accommodation. On the other hand, water transport and air transport were the main segments that strengthened the growth in the transportation sector.
The sectors that showed least optimistic signs were manufacturing and construction. Manufacturing sector remained on the lower side for the second quarter because of the lacklustre performance of its different segments including biomedical manufacturing and transport engineering. While talking about construction, only 2 out of 6 indicators, inventory and new orders, of this sector showed positive signs. Remaining all the parameters contracted instead of rising. This contraction is caused by the unsustainable growth of the private building segment.
All in all, the overall growth trend is a positive sign for the Singapore’s business economy. Apart from a couple of sectors showing lacklustre performance, the overall trend is encouraging with major sectors of the economy witnessed a prominent jump in the 2nd quarter of the year 2018.
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