Singapore business confidence for Q1 2024 continues recovery

SINGAPORE – Local business sentiment is improving for the second consecutive quarter as firms look ahead to the first three months of 2024, amid mixed outlooks for different sectors.

Data from the Singapore Commercial Credit Bureau (SCCB) released on Dec 4 showed that the Business Optimism Index rose slightly for the second consecutive quarter to +4.48 percentage points in Q1 2024, from +4.35 percentage points in Q4 2023.

Despite the sentiment index still being lower than the +4.73 percentage points seen in Q1 2023, it is recovering from the two-year low registered in Q3 2023.

The index, released quarterly, is based on responses from 200 business owners and senior executives about six factors: sales, profit, employment, selling prices, new orders and inventories.

Similar to Q4 2023, indicators of sales volume, net profit, selling prices, new orders, and employment levels stayed expansionary in Q1 2024, while inventory levels remained contractionary at -2.24 percentage points.

Only two of the six indicators improved on a quarter-on-quarter basis, namely selling prices and new orders.

Selling prices also rose on the year, to +11.94 percentage points in Q1 2024 from +8.96 percentage points in Q1 2023. Net profit increased to +2.24 percentage points in Q1 2024 from +0.75 percentage point in the same period last year. Other indicators either remained the same or deteriorated on a year-on-year basis.

SCCB’s chief executive Audrey Chia said: “Moving into 2024, the outlook for local businesses will remain cautiously optimistic for the first quarter amid downside risks in the global economy, and ongoing geo-political conflicts.

“However, we are likely to see continued growth in construction, tourism-related sectors, as well as a slight rebound in manufacturing with a projected recovery in demand for electronics and semiconductors.”

From a sectoral perspective, the construction and transportation sectors emerged as the most optimistic sectors with at least five of the six indicators in positive territory.

The outlook for the financial and manufacturing sectors has improved slightly as more indicators were positive compared with the previous quarter. Business sentiments within the services sector remained upbeat with four of the six indicators positive.

The wholesale sector, however, remained weak with only two of six indicators in positive territory, despite slight improvements in some of them. THE BUSINESS TIMES

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