Sluggish economy puts the squeeze on agencies as brands tighten the purse strings.
The most common word by used brands and agencies in Singapore to describe the current economic outlook is “conservative”.
Brands still have marketing money, but many agencies say they are reluctant to spend big at the moment.
This reticence comes on the back of a trying 2015, in which the economy expanded by 2.1 percent in 2015, in line with the Government’s official expectations and beating analysts’ expectations by around 0.2 points.
However, DBS senior economist Irvin Seah told Channel News Asia in January that overall GDP growth was at its slowest in six years.
"Growth outlook in the next six to nine months will remain tepid before an improvement in the later part of 2016 can be expected. This should bring overall GDP growth for 2016 to 2.1 per cent," Seah said.
According to economists, the better-than-expected numbers, however, did not detract from the underlying macroeconomic environment, which they said is "fluid" and "brittle", due to both structural and cyclical headwinds, noted Channel News Asia.
In terms of our Top 1000 brands survey, Samsung, Apple and Sony took the top three spots, followed by Nestlé. Local stalwart NTUC Fairprice came in fifth, Telco Singtel recorded a notable slump from 13 to 32, while Starhub climbed from 31 to 24.
For the rest of this year, experts predict much of Singapore’s economic outlook will depend on the fortunes of its manufacturing sector.
The manufacturing sector contracted by 6 per cent in the fourth quarter of 2015, extending the 5.9 per cent decline in the previous quarter and remains the weakest link for Singapore's economy.
The services sector, including retail sales, accounts for about two-thirds of Singapore's economy.
"While this sector is known to be a resilient and stable engine of growth for Singapore, performance of the sector going forward will continue to be affected by the existing domestic manpower crunch and drag from the manufacturing sector," Seah warned.