Over 82% of Singapore businesses surveyed in the recent Singapore Chinese Chamber of Commerce and Industry (SCCCI) poll said their main concern at the moment is to achieve revenue growth. The survey polled 972 respondents, of which 95% were SMEs.
This concern is the result of a sluggish economy mainly brought about by the prolonged US-China trade war. The current global developments have led these SMEs to prioritise revenue growth ahead of product innovation, talent retention and digitalisation.
Respondents also said aside from a huge dent in profits, they were also preparing themselves for a hit to profit margins. More than half of the businesses said they are expecting a decline in margins this year.
In the latest quarterly earnings season, Singapore-listed firms saw more hits than misses, while Singapore cut its official growth forecast for the second quarter to almost zero, on a flat economic performance in the first quarter.
Despite the slump, many of the survey participants (60%) expect to retain their present workforce. Only 17% said they would cut back on manpower.
Some chamber and association leaders say they are doing more to help companies grow their revenue but are also hoping that the government will lend its weight if the downturn persists.
The group’s president Roland Ng said the chamber is encouraging firms to go abroad and set up offices in Shanghai, Chengdu and Chongqing to help businesses break into the Chinese market. It is also recommended that firms host events like SME conferences so that these businesses can network and learn from fellow entrepreneurs and experts.
According to Mr Ng, the chamber is working with the government to find other strategies that could assist local SMEs and tap government support-schemes in order to upgrade themselves.
The Association of Small and Medium Enterprises (ASME) has a similar focus on internationalisation and is learning to support its members, many of whom are anxious over the adverse effects an economic slowdown and the trade tensions’ impact on their business.
“Generally from our own survey, SMEs this year are not looking at a great year and a lot are concerned about how the trade war will continue to take its toll on business,” said Ang Yuit, the association’s vice-president of membership and training.
Thus, ASME is organising more overseas studies and missions, and setting up “node points” abroad to help companies. It is also holding events for SMEs to share on challenges, and learn how to overcome them.
Still, both ASME and SCCCI hope the government will lend a hand if growth conditions worsen.
“Should economic prospects remain uncertain or if there is a protracted downturn in the global economy, I also hope the government is prepared to offer businesses timely and effective help,” said Ng.
Inquired on the type of assistance that the chamber is hoping to get from the government, Ng said the chamber would appreciate any effort by the government in alleviating escalating business costs.
“We can start looking at the situation now. We haven’t hit the point yet but we’re pretty close. I think it’s time to start preparing,” said Mr Ang.
He suggested potential broad-based measures like government spending, and encouraging more to buy from local SMEs instead of foreign companies.