Chart of the Day: No change for services sector

Guess which industry believes the business climate will be less favourable in the second half of 2012.

The Singapore Department of Statistics reported:

Majority of the firms in the services sector (a weighted 64%) expect the business climate to remain unchanged for the second half of 2012. A weighted 19% of firms expresses a positive outlook while a weighted 17% of firms expects business conditions to deteriorate.

Overall, a net weighted balance of 2% of firms anticipates an improved business situation for the next six months ending Dec 2012. The magnitude of the net weighted balance recorded for Jul - Dec 2012 is smaller than the net weighted balance of 6% recorded for Apr - Sep 2012 and that of 19% recorded for Jul - Dec 2011.

The wholesale trade industry expects business conditions to remain stable for the period of Jul - Dec 2012, with a positive net weighted balance of 4% of firms expecting the business situation to improve.

Within the retail trade industry, a net weighted balance of 15% of firms is optimistic about business prospects for the second half of 2012 compared with the first half of the year. These include department stores as well as retailers of wearing apparel & footwear and jewellery & watches, citing the year-end holiday season as the reason for their optimism.

The transport & storage industry expects business conditions to remain stable for the period of Jul - Dec 2012 compared with Jan - Jun 2012.

In the accommodation industry, a net weighted balance of 44% of firms is upbeat about business prospects for the next six months ending Dec 2012, expecting higher occupancy during the year-end holiday period.

A net weighted balance of 30% of firms in the food & beverage services industry expects brisk business in the coming months. Restaurants and food caterers are among those that project better business ahead in anticipation of the year-end holidays and festive season.

For the information & communications industry, a net weighted balance of 10% of firms anticipates an increase in business activity for the second half of 2012.

Firms in the financial and insurance industry are generally cautious in their business outlook for the six-month period ending Dec 2012, with the majority of firms (a weighted 72%) expecting the business situation to remain unchanged. A weighted 6% of firms expects business to improve while a weighted 22% of firms foresees business conditions to deteriorate. Consequently, an overall net weighted balance of 16% of firms in the financial and insurance industry expects the business climate to be less favourable for the period.

Within the real estate industry, majority of the firms (a weighted 74%) expect business to remain unchanged for the period of Jul - Dec 2012. A weighted 9% of firms expects business to improve while a weighted 17% of firms projects slower business.

This results in a net weighted balance of 8% of firms in the real estate industry anticipating less favourable business conditions.

The business services (excluding real estate) industry foresees demand for their services to remain at about the same level as the previous six months.

In the recreation, community & personal services industry, a net weighted balance of 12% of firms expresses positive business sentiments for the second half of 2012.