Companies in Singapore are gaining in confidence over their business prospects, according to a new survey.
The latest trade confidence survey by HSBC found that firms here were upbeat over their six-month business and trade outlook.
More than 50 per cent of Singapore companies surveyed expect to achieve volume growth in sales turnover over the next six months.
And almost as many - 47 per cent - are expecting an increase in cross-border trade volumes.
The report, released yesterday, noted: "The confidence stems from companies' expectation of broad stability in trade finance, and supplier and buyer risks."
In order to grow, 79 per cent of companies said getting new customers was going to be the key strategy to expand their business.
Identifying new markets was also one of the important strategies, with 69 per cent of firms saying so.
They were positive about Asia providing the most potential for international expansion, with 80 per cent saying so, and China and Indonesia are believed to offer the most opportunities.
Mr Steven Cranwell, head of commercial banking for HSBC in Singapore, said: "Companies in Singapore recognise that there are certainly bright spots on the horizon even though the growth outlook of regional economies has generally softened."
He noted that the local economy is still expected to grow despite global economic headwinds, and added that Asia's increasing adoption of a more open economic framework, brings opportunities for Singapore businesses.
More than 70 per cent of companies expected stable or positive economic growth in Singapore, while 60 per cent felt the same for the global economy. Firms expect positive developments in the local economy to result in stronger demand for their products and increased profits margins.
However, local companies are still concerned about strong competition, and the higher cost of labour and materials.
Some top concerns for international markets include strong competition, declining economic growth and unfavourable exchange rates.
The report noted: "Stemming from the recent international market dislocation, exchange rate volatility and interest rate inflation were cited as the top challenges Singaporean companies anticipate in their businesses."
This means that firms will have to ask for better payment terms with suppliers, cut costs internally and look for better interest rates.
Mr Cranwell said: "The regional currencies are already facing pressure from a stronger greenback and the prospects of an imminent United States Federal Reserve rate hike.
"Amid this volatile backdrop, companies need to assess their hedging strategies to settle their trade and mitigate the risks, as well as to work on maximising their working capital to realise their growth ambitions."