Singapore Commercial Credit Bureau (SCCB) has released the business sentiment report for Quarter 1, 2022.  Generally, Singapore businesses are upbeat with optimism amid uncertainties over the new COVID-19 variant, Omicron.  There are still worries among businesses on how it will affect both the local and global economy.   

Overview of Singapore business sentiment

Local business sentiment ‘has increased marginally despite reaching a 2-year high for Q1 2022’.  The study reported on quarter-to-quarter basis, three out of six indicators were expansionary as compared to four indicators in Q4 2021.

Positive improvement sentiment

• Selling price increased from 0 percentage point in Q4 2021 to +3.73 percentage points in Q1 2022.
• Inventory increased from -5.35 percentage points in Q4 2021 to -0.75 percentage points in Q1 2022.
• Employment levels rose from +12.12 percentage points in Q4 2021 to +13.53 percentage points in Q1 2022.

Slight decline sentiment

• Volume of sales declined +7.52 percentage points in Q4 2021 to +3.79 percentage points in Q1 2022.
• New orders declined slightly from +10.69 percentage points in Q4 2021 to +10.45 percentage points in Q1 2022.
• Net profits fell +9.63 percentage points in Q4 2021 to +4.58 percentage points in Q1 2022.

Industry breakdown

Manufacturing is the most upbeat sector, with all six indicators in positive territory.  However, sales volume, net profit and new orders fell slightly from Q4 2021.

Financial sector followed closely behind, with five out of six indicators in positive territory but with a few significant declines in 4 areas.  Volume sales saw a large decline from 41.67 percentage points in Q4 2021 to 16.67 percentage points in Q2 2022. In addition, net profit fell from 50.0 to 16.67 percentage points.  Inventory levels slipped from +8.33 percentage points in Q4 2021 to 0 percentage point in Q1 2022.

Service sector remains relatively upbeat with four out of six indicators in positive territory.  This service sector are expecting a rise in new orders and increase in inventory.

Transportation reported three out of six indicators in the positive territory.  However, generally most indicators have shown positive signs.  With volume of sales, net profit and selling price rebounding from negative to positive percentage points from Q4 2021 to Q1 2022.

Construction has improved slightly with 2 indicators in positive territory:

• Volume of sales rebounded from -7.69 to 0 percentage point in Q1 2022.
• Net profit rebounded from -7.14 percentage points in Q4 2021 to 0 percentage in Q1 2022.
• Selling price remained expansionary at +14.29 percentage points in Q1 2022.
• New orders rose from 8.33 to 16.67 percentage points.
• Inventory levels rebounded from -8.33 to 0 percentage point.
• Employment levels remained unchanged at 0 percentage point.

Wholesale sector sentiment has declined in five out of six indicators: 

• Volume of sales dropped from 13.33 to 0 percentage point.
• Net profit fell from 18.75 to 0 percentage point.
• Selling price fell from 6.25 to 0 percentage point.
• New orders fell from 12.5 to 6.25 percentage points.
• Employment level fell from 6.25 to 0 percentage point.
• Inventory level rose from -12.50 to -6.25 percentage points.

The report also stated that Singapore GDP growth for 2022 is forecasted to be between +3.0 to +5.0 per cent by The Ministry of Trade and Industry (MTI).  Singapore businesses are adjusting to the new norm and looking for a positive change in 2022.