Business optimism plunges to 3-year low as economic woes mount

Firms expect lower sales and profits.

Singapore-based companies are extremely downbeat about their growth outlook in the final quarter of 2015, according to the latest Business Optimism Index released by Dun & Bradstreet-Singapore Commercial Credit Bureau (SCCB).

The index took a dive from +14.60 percentage points in Q3 to +0.14 percentage points in Q4, the second lowest reading since the first quarter of 2013.

Both volume of sales and net profits have plunged significantly into the contractionary zone for the first time since Q1 this year, as heightened global economic volatility and China’s growth slowdown cast a pall over local business sentiments.

Overall volume of sales tumbled to -4.29 percentage points in Q4, a steep drop from from +27.86 percentage points in Q3. Moving in the similar direction, net profits crashed from +14.29 percentage points in Q3 to -0.71 percentage points in Q4.

“We are anticipating a challenging quarter ahead for businesses here as there has been a general decline in optimism levels across most sectors, even in the more optimistic construction and services sectors,” said Audrey Chia, Chief Executive Officer of Dun & Bradstreet Singapore.