Survey shows inflation has hurt business sentiment in S’pore
Surging inflation is not just affecting spending power - it is also having a damaging effect on business sentiment in Singapore.
A recent survey of accountants found that 64 per cent had a neutral to pessimistic view of the local economy.
Many expect growth to slow this year and that the employment outlook will be weak with few jobs created.
It was not hard to find the reason for their gloomy view. Inflation was cited by 90 per cent of the respondents as their chief concern, with turmoil in the credit markets and rising labour costs also listed.
In the survey - 202 members of the Institute of Certified Public Accountants of Singapore (Icpas) were polled - 79 per cent said rising food prices were the main contributor to inflation.
The best performing sectors this year are expected to be the hotel and restaurants, construction and health-care sectors.
This could be because of an anticipated tourism boom arising from a host of events slated for the next three years, including the Formula One race, the setting up of the integrated resorts and the 2010 Youth Olympics.
Manufacturing, wholesale and retail scored lowest on the optimism scale, as these are sentiment-reliant industries that would be hardest hit by the unsettled economic outlook.
Icpas vice-president Ernest Kan believes Singapore’s strong economic fundamentals and government support will help the country to ride out the pessimism.
Source : Straits Times - 7 May 2008
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