Guess what is the least optimistic sector in Singapore right now

Your guess is as good as ours.

According to Singapore Commercial Credit Bureau (SCCB)’s latest quarterly Business Optimism Index (BOI) study, riding on the back of a healthy expansion in the global economy, local business optimism has taken a turn for the better following signs of moderation in Q1 2014. Overall BOI score rebounded markedly from +13.13 percentage points in Q1 2014 to +22.66 percentage points in Q2 2014.

However, the SCCB noted that the agricultural sector is the least optimistic sector with only two business indicators in the expansionary region. While the agricultural sector has projected higher volume of sales and net profits, rising business costs, growing resource constraints and increasing environmental pressure are anticipated to inhibit supply response.

Inventory levels are expected to fall to -16.67 percentage points while hiring levels within the sector are also likely to be unchanged for Q2.

As for the overall BOI score, the SCCB said that the better showing comes after a drop in the overall BOI score last quarter when it plateaued from +33.98 percentage points in Q4 2013 to +13.33 percentage points in Q1 2014.

Compared to a year ago, overall BOI score has improved significantly from +10.73 percentage points to +22.66 percentage points in Q2 2014. All six business indicators have remained in the expansionary region in Q2 2014.

As with the previousquarter, local firms have remained most optimistic about volume of sales and net profits. According toSCCB, net optimism levels in volume of sales surged from 20.3 percentage points in Q1 to 45.26 percentage points in Q2 this year.

Similarly, optimism levels in net profits have increased sharply from 17.5 percentage points to 42.34 percentage points quarter-on-quarter (q-o-q). Following a sharp moderation in Q1, employment levels are expected to increase slightly from 10.5 percentage points in Q1 to 13.14 percentage points in Q2.

Meanwhile, manufacturers are anticipating an a higher volume in new orders this quarter as net optimism levels surged from 9.7 percentage points in Q1 to 38.09 percentage points this quarter. Selling prices have inched up slightly from 6.3 percentage points in Q1 to 8.76 percentage points in Q2.

Firms are least optimistic about inventory levels as it declined sharply from 11.9 percentage points to 1.46 percentage points.

Compared to the same quarter in the previous year, business sentiments have improved with 4 of six indicators experiencing increases in net optimism levels.

A year-on-year (y-o-y) analysis revealed that firms are more optimistic about volume of sales, net profits, selling price and inventory levels registering 17.5 percentage points, 11.67 percentage points, 0.83 percentage points and 5.83 percentage points respectively.

However, hiring levels have moderated slightly from 15.83 percentage points in the same quarter last year. New orders have also plateaued y-o-y from 50 percentage points in Q2 2013.

“As growth momentum in the local economy gathers pace, firms across most industries see brighter prospects this quarter.

For the record, overall BOI has been expansionary for the past five consecutive quarters. These findings also correlate strongly with the uptrend we have seen in GDP growth since the first quarter of 2013.” commented Ms. Audrey Chia, SCCB’s Chief Executive Officer.