SMEs more cautious about business expansion amid trade tensions, index shows

Skyscrapers in Singapore's financial district seen in a photo taken on March 19, 2018. PHOTO: ST FILE

SINGAPORE - Singapore SMEs will look to expand in 2019, but show greater caution than six months ago as trade tensions continue to simmer, the latest SBF-DP SME Index showed on Monday (Oct 8).

A joint initiative of the Singapore Business Federation (SBF) and DP Information Group (DP Info), the index measures the business sentiment of over 3,600 SMEs for the next six months.

Compared with the last quarter's index of 51.5, the latest overall outlook for SMEs is slightly moderated, decreasing quarter on quarter to 51. A score above 50 indicates an expectation of growth, while a score below 50 signals a possible contraction.

The manufacturing sector is downbeat on growth outlook compared with other sectors, even as all sectors reported a decrease in growth outlook. In particular, the manufacturers are watching more closely the impact on profitability ahead, given fears of increased input costs.

But the retail and F&B (food and beverage) sector reflects strongest outlook among the industries, due to the upcoming festive period and the rise of online delivery platforms.

The SBF-DP SME Index comprises inputs from SMEs on their expectations in seven key areas - turnover, profitability, business expansion, capital investment, hiring, capacity utilisation and access to financing.

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