SINGAPORE - German companies are upbeat about their business outlook in Singapore, with many looking to increase investments and hire more workers here, a recent survey has found.
However, some find that the standard of technical education could be better, rating the top three business risks here as a lack of market demand, insufficient qualified labour and labour costs.
These were some of the findings from the Singapore-Asean Business Climate Survey this year, carried out by the Singaporean-German Chamber of Industry and Commerce (SGC) and Association of German Chambers of Industries and Commerce.
This annual survey involved 68 member firms, out of around 3,500 member companies in Asean. German firms provide some 45,000 jobs here.
Announcing the results on Tuesday (Aug 14), SGC president Claus Trenner said: "German companies want to continue to hire in Singapore… but in line with government expectations or in line with other companies in Singapore, they need more qualified workers for the future workforce."
This is because many German firms come from technical industries or those intensive in research and development, he added.
The business outlook survey, which checks on the economic climate worldwide, found that 69 per cent of respondents from Singapore rated their current business situation as good, up from 52 per cent last year.
Respondents also expressed confidence in the Asean region, citing stable economies and positive growth. Most expect Singapore's medium-term economic outlook to either improve or stay the same.
German firms are expected to generate more jobs here as well, with about half of the respondents saying they plan to increase their headcount in the next 12 months. Only 6 per cent expect to shrink the size of their workforce.
However, the top three pain points of doing business in Singapore are a lack of market demand due to Singapore's size, lack of qualified labour and the labour costs.
Rohde and Schwarz Asia managing director Lim Boon Huat said companies need specialists in their fields who can do higher value work - but such workers are in demand around the world.
Should it be difficult to hire such employees, one solution is to upgrade the local workforce and have employers be more involved in this process, he added.
About half the companies surveyed rated the standard of technical education as "high" at universities and polytechnics. But close to 40 per cent felt it was "moderate" on both counts, and around 15 per cent replied that the standard was "low" in both types of institutions.
Noting that the survey reads businesses' sentiment on the issue, Nanyang Polytechnic principal Jeanne Liew said the results are likely related to companies' expectations of the Singapore workforce.
"Increasingly, because of the kinds of industries that German companies are in, they are really looking for specialists, very niche, qualified workers."
This is why there must be continuing education and training for graduates, who may not specialise too early in their careers, and this process should involve businesses as well, she added.
Companies also weighed in on the Asean Free Trade Area, Regional Comprehensive Economic Partnership (RCEP), and the European Union-Asean Free Trade Agreement.
With many German companies having established manufacturing plants in the region, close to 40 per cent of those surveyed in Singapore and Asean consider the Asean Free Trade Area as one of "high importance".
Similarly, 40 per cent of respondents from Singapore and 39 per cent of those from the Asean region attached high importance to the EU-Asean Free Trade Agreement.
Response was more muted for the RCEP, with 10 per cent of respondents in Singapore and 13 per cent in Asean believing its conclusion would be of high importance to them.
About 40 per cent of firms in Singapore and Asean rated it to be of "moderate importance".