German firms in S’pore see ‘psychological distress’ among staff from rising rents: Survey

Half of the German firms polled anticipate rents rising by 30 to 50 per cent this year. ST PHOTO: LIM YAOHUI

SINGAPORE - Rising housing rents have become a bugbear for German companies and their employees here, going by a survey conducted in February and released this week.

Almost half of German employers in Singapore polled, or 44 per cent, said “psychological distress and lower work performance is visible among staff” due to the unpredictable housing situation.

Half of the firms polled anticipate rents rising by 30 to 50 per cent in 2023, while 16 per cent see even higher increases of more than 50 per cent. This is after private housing rents surged by nearly 30 per cent in 2022, the fastest pace in 15 years.

These were the findings of a business sentiment survey conducted by the Singaporean-German Chamber of Industry and Commerce (SGC), with 104 of its member firms taking part.

It also found that 43 per cent of German firms polled would consider relocating certain business functions out of Singapore to other countries – namely Malaysia, Vietnam and Thailand – due to increasing costs and difficulty in recruiting talent.

Higher costs are coming from rising salaries in particular, and also inflation, travel as well as rental for business spaces and housing allowances, said the survey report.

More than a third of the companies polled (37 per cent) found it more difficult to obtain Employment Passes for their foreign employees during the past 12 months in Singapore.

At the same time, 65 per cent of companies wish to hire more workers in Singapore but find it challenging to find qualified talent in fields such as engineering and information technology as well as for regional or leadership and management roles.

Seven per cent of the firms polled said that they plan to decrease their headcount.

Despite inflation, costs and geopolitical challenges, half of the German firms polled (51 per cent) remain optimistic about the economic outlook.

The firms see great market potential mainly within South-east Asia, with India and Greater China viewed as attractive markets with high growth potential.

“This survey shows clearly that the current economic challenges remain,” said Mr Jens Ruebbert, SGC president. “Nevertheless, our members here in Singapore in general have an optimistic outlook.”

“This should be a commitment to preserve and build on Singapore’s proven location qualities for businesses: predictability, openness to foreign talent, the secure legal environment, freedom from corruption, and reliability,” he added.

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