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Singapore SMEs expecting decline in turnover this year

This article is more than 12 months old

More small and medium-sized enterprises (SMEs) in Singapore are expecting a decline in turnover this year, citing the challenging business environment as the main culprit for the dampened outlook, partly weighed down by the US-China trade tensions.

The 2018 SME Development Survey by DP Info found that 15 per cent of SMEs projected negative turnover growth for this year, up from 11 per cent in last year and 12 per cent in 2016. Two in five expect turnover growth this year.

The survey, now in its 16th edition, had 2,557 SME respondents and was conducted between June and August this year.

About one in five said they have been affected by the ongoing trade conflict between the US and China, according to the report.

Of that, 54 per cent said it has affected the competitiveness of exports, while 40 per cent said that it reduced overseas sales. Some 28 per cent of SMEs said it has affected or delayed their internationalisation plans.

Despite the trade headwinds, SMEs are still looking to expand abroad. Asia continues to be a focal point in their search for new markets, with greater interest seen in Asean, especially in the Philippines and Thailand this year, said the report.

High manpower costs continue to be the top concern for 36 per cent of SMEs, followed by increased domestic competition at 32 per cent.

The findings reflected a rise in labour issues, with more firms citing difficulty in hiring staff (28 per cent) and retaining staff (11 per cent) compared to last year.

Cash flow also remains a concern for SMEs. While one in three firms faced external finance-related issues, a ratio which was similar to last year, there was an increase in those facing delayed payments from customers.

Delayed payments from customers - the top finance-related issue faced by SMEs - went up from 81 per cent last year to 84 per cent this year. - THE STRAITS TIMES