SINGAPORE (THE BUSINESS TIMES) – Some 57.3 per cent of Singapore businesses surveyed saw their costs rise this year, nearly double the 28.8 per cent who did so last year.
Of those who reported higher costs, about three-quarters said that their costs are up by 25 per cent. The survey also flagged rising business costs as the biggest concern among businesses, followed by availability of suitable manpower and pandemic-related restrictions.
Conducted between June 10 and Aug 11, the annual survey by the Singapore Chinese Chamber of Commerce & Industry (SCCCI) garnered feedback from 1,058 businesses, of which 92 per cent were small and medium-sized enterprises (SMEs). Most were in the services sector, while others were in manufacturing and construction.
Sentiment on financial performance remains depressed, albeit improved from last year. Some 47.2 per cent of businesses are projecting a decline in their revenue for 2021. This is down from the 80.3 per cent of firms that projected revenue decreases last year.
But a sizable 40 per cent of businesses are expecting losses for this year. Of this group, close to half of them say that their losses will be greater than last year’s.
Firms’ outlook for recovery is also cautious. About 60 per cent of the survey’s respondents expect that it will take two or more years for their businesses to be recover to pre-Covid levels. Tourism, construction and retail are among the hardest-hit sectors.
On the manpower front, rising costs – including for foreign workers – are the biggest worry. Other top concerns are the inability to recruit local staff with required skills, as well as difficulty in hiring foreign workers.
The proportion of companies that have cut headcount is 28.8 per cent, up 6.5 percentage points from last year. This is mainly due to more SMEs “right-sizing”, SCCCI said in its report. The tight manpower situation has also made it difficult for companies to send employees for reskilling and upskilling
Nevertheless, about 58 per cent of respondents are still maintaining their workforce, aided by the Jobs Support Scheme, SGUnited Jobs Package and Jobs Growth Incentive. Some 13.5 per cent of respondents are expanding headcount.
Internationalisation is another bright spot. Almost 60 per cent of respondents plan to venture overseas, compared with 50.7 per cent last year. China, Malaysia and Indonesia are the top markets of interest.
In line with the findings, the SCCCI recommends taking a balanced approach towards local and foreign manpower – recognising that foreign workers complement local workforce. In addition, it is calling for continued support for businesses in the “transition towards a Covid-19 resilient economy”.
The chamber also suggested implementing measures to further ease business travel, assist SMEs on sustainability efforts and provide more funding support for local trade associations.
SCCCI president Roland Ng emphasised that it is crucial for Singapore businesses to venture abroad. “Physical trips are essential in strengthening connections and building mutual trust with foreign authorities and business partners.
“Therefore, quarantine requirements should not be a deterring factor to postpone cross-border travel. With proper planning, business owners may leverage on technology to stay connected and work efficiently with Singapore office during quarantine,” he said.
Mr Ng, who has travelled to China four times during the pandemic, also encouraged businesses to be more proactive and less-reliant on government assistance.