SINGAPORE - The strengthening economic outlook has lifted business sentiment, with companies' priorities increasingly shifting towards growing sales instead of cutting costs, a new survey has found.
But some companies may not benefit as much despite brighter prospects. As many as a quarter of those polled by the Singapore Business Federation (SBF) in its annual National Business Survey have yet to take significant steps towards business transformation. These companies were also more likely to suffer lacklustre growth.
The survey asked 1,019 companies about their concerns and outlook for the coming year. About 84 per cent of respondents were small and medium-sized enterprises (SMEs), while the rest were large firms.
The data was collected from Oct 11 to Dec 13, 2017.
The survey found that business sentiment picked up compared with the preceding year's poll.
Thirty-six per cent of those polled in the latest survey said that they are satisfied with the current business climate, while 68 per cent said that business conditions have either improved or remained the same over the past 12 months.
Three in 10 of those surveyed said that they expect further improvement in the next 12 months.
When it comes to business priorities for this year, revenue growth came up tops with 68 per cent of respondents identifying it as a key goal. This was followed by cost-cutting, at 44 per cent.
The survey also showed that manpower and costs remain key concerns for companies. Seventy-two per cent of those polled said that hiring people with the right skills and attitude is a challenge, followed by 58 per cent who said that they are grappling with high operating costs (excluding labour costs).
Companies were also asked about their restructuring and business transformation plans. About a third of those surveyed said that they have implemented significant changes in a bid to become more innovative.
However, one in four of the firms polled said that they have yet to implement any notable course of action when it comes to transformation.
Six in 10 of these "slow starters" reported lower profitability in the past year, compared with the average of 44 per cent of all businesses surveyed.
Companies which have made some effort to transform were also more likely to have implemented new technology, experienced greater growth here and overseas as well as increased their profits, the poll found.
In addition, half of those polled said that Industry Transformation Maps (ITMs) - road maps for the development of each sector - are a good idea, but also said that they do not know enough to assess their impact.
These road maps - rolled out under a S$4.5 billion programme announced in Budget 2016 - will chart strategies for 23 industries, covering over four-fifths of the nation's gross domestic product.