Monitoring Corporate Health in Singapore Using a Machine Learning Modelling Approach

In this study, we develop a Corporate Health Index (CHI) to monitor corporate health in Singapore on a more timely and forward-looking basis by applying predictive machine learning approaches on a range of firm-level indicators, including higher-frequency indicators that capture information on firms’ ability to meet their cashflow obligations.

We find that corporate health in Singapore is affected by macroeconomic developments, such as the tightening and loosening of pandemic-era restrictions, as well as global interest rate hikes. We also find that the corporate health of small- and medium-sized enterprises (SMEs) is systematically worse than that of non-SMEs.

Looking ahead, the CHI suggests that overall corporate health in Singapore is likely to remain stable in the near term. We will continue to monitor the CHI closely in the coming months given the prevailing economic headwinds.

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