Singapore businesses continue to face economic uncertainty

With the economic outlook continuing to be fraught with uncertainty because of the COVID-19 pandemic, many businesses in Singapore continue to face challenges in sustaining their businesses, managing their manpower and coping with cash flow issues.

But while 62% of firms surveyed recently by the Singapore Business Federation (SBF) expect the uncertain climate to persist, 87% of large companies and 66% of SMEs believe they can sustain business operations, although they expect to post thinner profit margins or small operating losses.

On the flip side, 29% of SMEs and 11% of large companies expect to either downsize or shut their operations entirely. Conducted over two weeks in August this year, the survey gathered responses from 225 companies, 83% of which were SMEs, while the rest were large enterprises.

The majority of companies (62%) expect to maintain staff levels in 2021, with 20% indicating they are likely to reduce headcount. Those with plan to hire (18%) are more inclined to employ professionals, managers and executives, while those who intend to reduce hiring will hire less clerical support, service and sales workers.

READ: 224,800 workers in Singapore affected by cost-cutting measures

SMF also reported that 75% of firms are seeing a drop in productivity, with large companies more motivated to direct more resources to digitalisation. For SMEs, the priority lies in building financial resilience through the restructuring of their businesses through innovation and automation.

Ho Meng Kit, chief executive of the SBF, added, “Businesses need to take this window of opportunity to rethink their business models and reinvent themselves to seize new opportunities and remain viable.”