Against the global backdrop of rising market and geopolitical volatility, companies in Singapore are taking concrete actions to make the best of potential uncertainties despite mixed sentiments, as reflected in a recent survey conducted by TMF Group, a leading provider of international business administration support services.
The survey polled over 1,700 companies worldwide to identify the top business predictions for 2020, and included 250 Singapore firms from small to large sizes, to gauge their market outlook and key actions taken to address shifts in global markets.
Across multiple sectors and firm sizes, Singapore companies were split on their business outlook for 2020, displaying a mix of caution and optimism. Specifically, the survey reflected an almost even split between those expressing concern and those seeing opportunity from key international developments.
For example, 38% believed the US and China trade dispute would have a negative impact on the local economy, whilst 32% believed it would have a positive impact. Similarly, 32% considered Brexit as a risk to the Singapore market, in contrast with 30% who considered it an opportunity.
Meanwhile, 30% expressed a pessimistic view for Singapore in light of US and EU trade tensions, with an equally opposing 30% expressing an optimistic view.
Despite the mixed sentiments, Singapore businesses are nonetheless gearing up and taking actions to mitigate risks and leverage potential opportunities arising from these global developments. 38% of local firms revealed that they have increased their operations by expanding their workforce and boosting production capabilities in other countries to avoid being affected by trade disputes.
This is in conjunction with firms planning to reduce their operations in countries affected by Brexit (37%) and trade wars (34%). Additionally, 33% said that they have plans to restructure parts of their business, such as modifying their supply chains in order to avoid the risk of trade disputes.
“As businesses attempt to navigate rising global complexities, this timely survey helps us better understand how local firms are gearing up to make the best of international developments – both to mitigate risks and to capitalize on new opportunities,” said Edmund Lee, Managing Director for Singapore at TMF Group.
He continued: “while Singapore ranks as one of the easiest places to do business in Asia, its open economy pegs its growth prospects closely to the external environment. Geopolitical issues may present opportunities for local firms that are well-prepared and have robust strategies. A particularly relevant issue closer to home is how the volatile socio-political situation in Hong Kong is spurring business prospects in Singapore.”
The survey also revealed the top challenges businesses expect for the next decade till 2030. Singapore firms identified trade wars (39%) and the global economic slowdown (3%) as immediate key challenges for home-grown businesses that operate across multiple jurisdictions. This is followed by political and socioeconomic pressures over climate change affecting business strategies and operations (34%).
Looking ahead, while trade tensions and the global economic slowdown will continue to be at the forefront of business concerns for the next few years, 34% of firms expect cyber-crime to become another key challenge for businesses in Singapore by 2030.