Service optimism thins to 4% as shipping slump drags

Wholesale trade anticipates a major boost from the ongoing Windows 11 refresh and hardware renewals.

Optimism amongst service firms is thinning, with only 4% of companies anticipating a positive business outlook over the next six months, down from 7% a year ago.

“Fifteen percent of firms are upbeat about business conditions whilst 11% foresee deteriorating business conditions, resulting in a net weighted balance of 4% of firms expecting a more favourable business outlook,” said the Department of Statistics Singapore’s latest Business Expectations Survey.

Compared to the previous six months, the overall sentiment improved. Seventeen percent of firms expected better conditions, whilst 15% expected things to worsen, resulting in a net weighted balance of 2% of firms expecting a more favourable business outlook.

“The services sector, with a net weighted balance of 3% of firms, foresees higher revenue for the period of January to March 2026,” the department said.

The latest survey saw that most industries express positive sentiments on their business conditions for the January to June 2026 period.

The Retail Trade industry expressed positive business sentiments, led by supermarkets’ optimistic expectations due to the upcoming festive period, notably Chinese New Year.

The Wholesale Trade industry is also optimistic, as wholesalers of the Computers, Computer Peripheral Equipment and Software sector expect the ongoing Windows 11 refresh and continued corporate hardware renewals to support market activity. Artificial Intelligence (AI)- related products and system upgrades are also expected to drive growth, the department said.

Another sector expecting expansion is the Recreation, Community & Personal Services industry. Specifically, the childcare centres and health services providers anticipate a sustained demand for their services.

Meanwhile, the Transportation & Storage industry foresees more challenging business conditions, primarily due to the Water Transport industry.

“Water transport firms anticipate continued challenges due to persistent oversupply of vessels and weakening cargo demand, leading to lower freight rates. Global economic uncertainties and geopolitical tensions have also further dampened market confidence,” the department said.

The Food and Beverage (F&B) industry is also less upbeat, which aligns with the year-end holidays and festive season.

An earlier DBS report said that restaurants are expected to bear the brunt of consumer downtrading, with vouchers usable at supermarkets and hawker centres until the end of 2026. Total F&B sales, excluding hawkers, are forecast to fall 1.2% year on year in 2026 to about $11.8b.