Singapore SMEs remain cautiously optimistic about business prospects in the next six months, with key economic sectors showing a slight uptick in reading, according to the latest SBF-Experian SME Index.
The ongoing trade tensions between US and China has cast a shadow over the Singapore economy. Notwithstanding a slight increase in the reading from 50.4 to 50.8 this quarter, the Index has fallen 1.95% year-on-year and is the lowest 3Q – 4Q reading in the last six years.
Similarly, Ministry of Trade and Industry noted that the global growth outlook remains clouded by uncertainties and downside risks including the escalation of trade tensions between the US and its key trading partners especially China, a slower-than-expected growth in the Chinese economy, and a possible “no-deal Brexit” in Britain’s withdrawal from the European Union.
The Index – a joint initiative of the Singapore Business Federation (SBF) and Experian – measures the business sentiment of SMEs in Singapore for the next six months (July 2019 to December 2019). The 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. This index is based on a survey of more than 3,600 SMEs conducted between 15 April and 24 May 2019.
An open trade economy like Singapore is likely to be affected in today’s suboptimal macroeconomic environment, intensified by uncertainties from the ongoing trade tensions and a general economic slowdown across ASEAN. This is evident from the SMEs Commerce / Trading sector as they are the only sector this quarter to see a fall in optimism. However, we do see an uptick in sentiments in other sectors as SMEs are planning to take advantage of Budget 2019 measures and the upcoming holiday spending season,” said James Gothard, General Manager, Credit Services & Strategy, Southeast Asia, Experian.