Tell-Tale Signs Of The Times

Foreword from ShareInvestor

This article “Tell-Tale Signs Of The Times” by Chen HuiFen was first published in The Business Times on 03 Dec 2007 and is reproduced in this blog in its entirety.

Looks at some less obvious indicators and explains their role in gauging the course of an economy

In this section last week, we talked about economic indicators that can have a bearing on a nation, noting that industry trends and company outlook are often dependent on how well a nation does.

Some of the factors discussed are the gross domestic product (the main figure which is most followed by analysts and economists), the consumer price index (which gives an idea of inflation), manufacturing output (how much goods the factories and plants here are making), trade figures (especially for export dependent economies like Singapore) and jobs data (as a gauge of employment and unemployment trends).

This week, we delve into some less obvious indicators to see how they can play a role in gauging the course of an economy. Bear in mind that each indicator should not be viewed on its own. Rather, it should be looked at in conjunction with the other indicators.

Consumer Confidence Index

There is no official forecast or tracking of the consumer confidence index in Singapore, but economists and analysts tend to assess consumer confidence from other variables, like home sales or retail sales data. The private sector observers like MasterCard and AC Nielsen are known to conduct surveys frequently to gauge consumer sentiment. Usually, survey respondents are asked about their willingness to spend in the future, their outlook on the economy and their personal job prospects.

Because of the nature of the questions asked, consumer confidence is sometimes subjective – although it gives businesses an idea of how optimistic or pessimistic the general public is, compared to their peers in other economies.

Retail Sales

Singapore’s monthly retail sales index is released by the Department of Statistics (, together with the catering trade index. The data is released about six weeks after the end of the month and measures the performance of the retail and catering trade based on their sales records. Sub group data are also available, so one can tell which retail sector (such as motor traders, department stores, or furniture and household equipment sellers) and which catering group (restaurants or fast food outlets) are doing well or badly.

Sometimes, retail sales can be a barometer for inflation signs, especially if growth is strong and is in tandem with rising wages across the board. On the other hand, if retail sales are stalled or slowing, it could indicate a dip in personal consumption and perhaps even early signs of a recession if the trend persists.

Business Expectations Survey

Somewhat like the confidence index, but for businesses and companies, the business expectations survey is categorised into the manufacturing and services sectors. The expectations findings for the services sector is released by the Department of Statistics and that for the manufacturing industry is published by the Economic Development Board ( Both are done on a quarterly basis, giving the future outlook of companies surveyed. Companies are asked whether they will increase their hiring, earnings and output in the upcoming six months. It is sometimes viewed together with the purchasing manufacturers’ index.

Purchasing Manufacturers’ Index

Also known as the PMI, the purchasing manufacturers’ index is derived by the Singapore Institute of Purchasing & Materials Management (, which polls its members in various industries every month. The index takes into account new orders, input prices, inventory, production output and the employment situation. A PMI of 50 and above indicates that manufacturing is generally expanding, and a figure below that indicates decline. The figures for the electronics manufacturing grouping is especially widely watched as the sector is the largest segment in Singapore’s manufacturing industry.

Business Receipts Index

The Business receipts index (BRI) for services industries measures the overall activity in Singapore’s services sector. It covers business revenue of 10 services sectors here, including financial and insurance services, transport and storage services, business services and health services. It provides a barometer of the services industries, in a similar way as the monthly industrial production output data does for the manufacturing industry.