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Singapore’s 1Q business confidence dips on surprise fall in Feb exports: Reuters/Insead survey

SINGAPORE (Mar 21): Business confidence in Singapore dipped over the first quarter of 2018 even as the region’s business sentiment reached a seven-year high, according to the Thomson Reuters/Insead Asian Business Sentiment Survey for the first quarter.

During the Jan-Mar period, Singapore’s sub-index declined to 75 from 79 due to Feb’s surprise dip in exports as tech product shipments continued to retreat from the hot pace of recent months.

The Thomson Reuters/Insead Asian Business Sentiment represents the six-month outlook of 67 firms in Asia. A reading above 50 indicates a positive outlook.

The overall index for the whole Asian region advanced a notch to 79 from 78 three months ago, driven by robust jumps in sentiment from Thailand, the Philippines and Malaysia, which Reuters attributes to the benefits enjoyed by Asia from accelerating growth.

China’s soaring exports, in particular, has driven the country’s index significantly up to 88 from 83 in 1Q18 in spite of US President Donald Trump’s intent to announce additional import tariffs targeted specifically at China.

Conversely, South Korean sentiment appears to have been battered by Trump’s threats of scrapping the US free-trade deal with the country, resulting in the plunging of South Korea’s subindex to 50 from 83.

Amid an environment of subdued consumer spending, Japan recorded its lowest reading in a year at 67 from 70 in 4Q17.

Sector-wise, retail & leisure, healthcare and the auto sectors hit record-high readings in the index, although concerns over trade friction and rising interest rates remained.

“The improvement [in overall Asian business sentiment] is not dramatic but with a historical perspective this is a good reading,” Antonio Fatas, a Singapore-based economics professor at Insead was quoted saying by Reuters.

On China’s higher sub-index score this quarter, he explains: “China… has escaped the fear of a crisis that started back in 2016 and that’s why you see strong confidence. Imbalances persist but there is no real threat of a crisis over the short term.”

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