SMEs have mixed feelings about business prospects for next six months

Singapore small and medium enterprises (SMEs) have mixed sentiments about the business outlook for the next six months, with the business services and the construction and engineering sectors the most positive. -- ST PHOTO: RUDY WONG
Singapore small and medium enterprises (SMEs) have mixed sentiments about the business outlook for the next six months, with the business services and the construction and engineering sectors the most positive. -- ST PHOTO: RUDY WONG

SINGAPORE - Singapore small and medium enterprises (SMEs) have mixed sentiments about the business outlook for the next six months, with the business services and the construction and engineering sectors the most positive.

The overall index for the SBF-DP SME Index rose by 1.1 per cent to 55.5 in October from 54.8 in July this year, the Singapore Business Federation (SBF) and DP Information Group said in a press release on Friday.

A score above 50 indicates that SMEs have a positive outlook for their business prospects for the next six months.

The index, done quarterly, is based on 3,000 interviews with SME owners and managers, and the financial performance of SMEs. Five industry sectors are tracked.

Overall turnover expectations increased to 5.71 from 5.65, led by the business services and construction/engineering industries. But softening global demand has affected the commerce/trading, manufacturing and transport/storage SMEs, with these three sectors reporting lower revenue expectations in the next 6 months.

The SMEs are adopting various approaches to counter balance the continuing tight domestic labour market, high operating cost and a sluggish global economy, said the survey.

Hiring expectations remain high for all five with the sub-index up at 5.62 from 5.37 last quarter.

"The positive sentiment from the business services and construction/engineering sectors provides the first sign of a brighter outlook for SMEs in these sectors," said Mr Ho Meng Kit, CEO of SBF. "However, this is not reflected in the outlook of the other sectors yet. The improved sentiment is therefore patchy."

"There are good signs that companies are responding to the call for restructuring," he added. "Capital investments expectations are up. We see business sentiments holding up well in the past few quarters in spite of the very tough constraints in the Singapore market. This shows that our SMEs are resilient and confident.