Singaporean businesses are becoming less optimistic about their prospects due to mounting external risks, two government surveys have revealed.
A survey by Singapore’s statistics department showed that the finance and insurance industry’s business confidence dropped sharply, with only 1% of firms saying they were confident about their futures, down from 14% in the survey’s previous edition three months ago, Nikkei reported.
For the entire services sector, a net 3% of firms were optimistic, down from 9%. The survey was carried out in September and October, with responses weighted to reflect the respective companies’ sizes.
Meanwhile, a separate quarterly survey by the Economic Development Board said that the manufacturing sector is also bearish, in contrast to bullish sentiments in the previous quarter.
The drop in business confidence was attributed to an unexpected decrease in factory output for September, leading economists to trim their growth forecasts. Worsening economic conditions in other Asian countries, such as China and South Korea, strengthened the view that Singapore could become collateral damage.
However, the Monetary Authority of Singapore (MAS) remains confident about the economy. In a report last week, it said that economic growth for 2018 is likely to end up in the upper half of its forecast range of 2.5% to 3.5%, before tapering off in 2019.
MAS said that it expects the finance and technology sectors to remain strong amid external risks such as trade tensions between the global giant economies of the US and China.
