Singapore Business Federation (SBF) National Business Survey 2011/12
Businesses:
Less optimistic on economic growth and profitability
Most concerned with rising business and manpower costs
Singapore, Thursday, 2 February 2012 - The Singapore Business Federation (SBF) today shared the findings of its annual National Business Survey, which provides an outlook on the needs, concerns and issues faced by its members in growing their business in the year ahead. Conducted in Nov 2011, the findings indicate that the sentiments of the business community on the economic and business environment in 2012 have dampened, with respondents being less confident about economic growth and profitability. The findings also include companies' inputs for Budget 2012, and provided basis for the SBF-led SME Committee (SMEC) recommendations to the government.
Business Outlook for 2012
For the second year in a row, companies expect Sales Turnover and Net Profit to remain stable, and do not foresee a pick-up in turnover growth.
Of the 973 respondents:
- 11% project a possible decrease in their Sales Turnover (vs 7% for 2011)
- 45% remain optimistic about Singapore's Economic Growth (vs 80% for 2011)
- 50% expect their business to be Profitable in 2012 (vs 69% for 2011)
With 31% of companies expecting to be negatively impacted by the Existing Economic Instability in the Eurozone and US, businesses are adopting new strategies to remain buoyant:
- 78% seek to Increase Cost Efficiency / Productivity (vs 61% for 2011)
- 58% will look into Offering New Products / Services (vs 40% for 2011)
- 50% intend to Source for Cheaper Raw Materials / Final Products (vs 13% for 2011)
Such measures are reflective of companies' biggest concerns - Increasing Competition (61%), and Slow Growth in Sales (56%). Members also expect to see Delays in Projects and Payments, as well Increased Business Costs, with Labour, Material and Rental Costs being of utmost concern. In addition, businesses are also anticipating Tightened Credit Access to Suppliers, Insufficient Cashflow, and more Expensive Bank Loans.
This belt-tightening will also impact the workforce, with companies planning to reduce headcounts for Part Time / Contract Staff and Foreign Workers, due to increased labour costs and an uncertain economy.
Budget 2012 Wishlist
Of the companies surveyed on their hopes for Budget 2012:
- 45% have highlighted the Usefulness of Budget 2011 to their businesses (vs 30% for 2011)
In the upcoming Budget, the key measures members would like to see addressed are the Reduction of Business Costs (76%), support in Manpower Related Costs and Issues (40%), and Investment in Training and Development (22%).
For Reduction of Business Costs, companies have also come up with their wishlist, with Lowering of Foreign Worker Levy (20%), Lowering of Rental Costs (15%), and Lowering of Taxes (15%), being of greater concern.
Mr Ho Meng Kit, Chief Executive Officer of SBF comments, "In light of the uncertain economic climate, it is heartening to note that businesses have been generally successful in doing more with less, and are tiding over this period by engaging in capacity building activities. We need to watch this volatile situation carefully. If the situation worsens, SBF working alongside our SME Committee will stand ready to assist our members."
Key Findings of the SBF National Business Survey 2011/12 (Click here)
About SME Committee (SMEC)
Established under the auspices of the Singapore Business Federation (SBF) in response to the growing challenges SMEs face in the evolving local business environment and global economic climate, SMEC aims to function as a key platform for engagement between the SME community and policymakers to discuss, research and analyse SME business issues to effect business-friendly policies in Singapore. The SMEC also aims to look ahead of trends and developments that impact business sentiments and growth, by leveraging on SBF's position as the apex business chamber to facilitate its work as an issue-focused outreach and feedback channel.
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