New research shows that Singapore is just ahead of the wider Asia Pacific region in terms of business confidence. Its economy, while still under pressure, is stabilising.
The Global Economic Conditions Survey from ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA), which gauges the views of finance professionals across the world, revealed that Singapore was moving towards greater stability. Although there remained pressures on businesses, confidence grew in the first quarter of 2013.
The global survey of 2000 finance professionals working in businesses of all sizes showed that while 40% of respondents in Singapore were less confident about the prospects of their organisations than three months ago, this was down from 51%
reporting a loss of confidence in late 2012. Those reporting no change went from 30% to 44% of the Singapore sample.
Emmanouil Schizas, Senior Economic Analyst at ACCA, said: “In Singapore this quarter, pressure on cash-flow and orders increased although over the medium term they are fairly stable. Similarly, although business opportunities dwindled in early 2013, following a brief surge in late 2012, they are still above average levels seen over the last six quarters.”
Leong Soo Yee, head of ACCA Singapore, said: “This is a market to watch. Inflation and FX volatility increased in the first quarter, interrupting what appeared to be a steady improvement over the last year. However, businesses have seen external investment opportunities multiply in early 2013. This puts pressure on businesses to release whatever funds they’ve been hoarding and it will be interesting to see where this money ends up and what, if any, improvements in confidence finance professionals report back in the second quarter.”
The global outlook
The survey found that globally, nearly one quarter (24%) of respondents reported they were more confident about the prospects of their organisations than three months earlier, up from 19% in late 2012, while 37% reported a loss of confidence, down from 43%. The highest confidence levels were in the Middle East.
More than two-fifths (43%) of respondents in early 2013 believed the global economy was improving or about to do so, up from 30% in the previous quarter, while just over half (54%) expected deterioration or stagnation, down from 65% in late 2012.
ACCA’s Emmanouil Schizas said: “The global confidence gains recorded in Q1 2013 are much larger than what would be expected given the conditions on the ground. With the exception of Africa, it seems confidence is being fuelled by an expectation of economic improvement in the future, but it’s not clear, when looking at the fundamentals, where this is meant to come from. As a result, we believe this surge in confidence is likely to be short-lived as it may be driven more by speculation rather than fundamentals.”