World Economy

Singapore SMEs Dip for 3rd Straight Quarter

Singapore SMEs Dip for 3rd Straight QuarterSingapore SMEs Dip for 3rd Straight Quarter

Small- and medium-size enterprises (SMEs) in Singapore expect their sales and profits to weaken during the next two quarters, with business confidence at the lowest level since the start of 2013, according to an index released on Tuesday.

According to the SBF-DP SME Index–a forward-looking index which measures the sentiments of SMEs–for the third and fourth quarter of 2015, the level of business confidence among Singapore SMEs fell compared to last quarter, with the Overall index score dipping from 54.0 to 53.5, Channel NewsAsia reported.

Four of the six industries included in the Index–commerce and trading, manufacturing, retail and food and beverage, and transport and storage–are all less optimistic than they were three months ago, while for business services companies, the outlook remains the same. Only the construction sector bucked the trend with a slight increase in its index score from 53.6 to 54.0.

Lincoln Teo, Chief Operating Officer of DP Information Group, said SMEs are less optimistic but have yet to sink into pessimism. “While optimism is declining, this is most likely due to an absence of good news than any particular piece of bad news,” he said.

“The government’s sustained push on productivity and lifelong learning is underpinning the confidence of the services sector. And the commitment to infrastructure development is boosting sentiment among construction firms.”

According to the survey, turnover expectations fell from an index score of 5.57 to 5.55. Profit expectations declined to 5.44, from 5.47 last quarter, while hiring expectations dipped to 5.46 from 5.70.

“Continued waning confidence in hiring has forced SMEs to look toward productivity and operational efficiency measures as the two most viable solutions to meet year-end demand,” the Singapore Business Federation and DP Information Group said in a joint statement.

SMEs are also choosing to invest capital in a bid to stave off manpower issues in the mid to long term, it said, adding that government grants continue to drive capability development in SMEs.