SINGAPORE: United Overseas Bank’s latest business outlook report has shown that nearly half of the businesses (45 per cent) would like to see more support measures to cope with high inflation from this year’s National Budget, which Deputy Prime Minister and Finance Minister Lawrence Wong is scheduled to roll out on Friday (Feb 16) at 3:30 pm.
This is a marked increase, or 19 per cent higher, than the 26 per cent who had the same response in the 2023 outlook.
UOB’s Business (SME & Large Enterprises) Outlook Study 2024 also showed that 42 per cent want to see higher SkillsFuture credits in Budget 2024, up from 32 per cent last year. Meanwhile, 29 per cent would like to see incentives to adopt sustainable practices, a 10 per cent increase from 2023.
Furthermore, 34 per cent of the firms that participated in the study said they would like more support for the 9 per cent GST rate hike that took effect on Jan 1, 2024, while 39 per cent said they want to see rants and extra funding for digital adoption. Another item on firms’ wish lists is the reduction of foreign worker levies (33 per cent).
A sizable number of businesses, 84 per cent, cited being somewhat or highly affected by inflation. Over three-fifths (63 per cent) of the firms said their operating expenses have risen due to higher inflation, and 42 per cent of firms said that raw materials have gotten higher.
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UOB’s report says that these are the top six industries affected by inflation: industrials/oil & gas (91 per cent), manufacturing and engineering (90 per cent), tech, media and telecom (86 per cent), professional services (85 per cent), construction and infrastructure (84 per cent), and consumer goods (84 per cent).
UOB surveyed 800 small and medium-sized enterprises in Singapore between the end of December 2023 and the middle of January 2024.
Small businesses appear to have been harder hit these days, as more of them (28 per cent) would like to see additional support to manage their working capital needs compared to medium-sized firms (16 per cent).
Moreover, a third of small businesses (33 per cent) said they’re worried about the loss of profits due to lower customer spending, while only 19 per cent of medium-sized businesses said the same.
UOB’s report also shows that three-fifths (60 per cent) of firms say they were prepared for this year’s GST hike to 9 per cent, while in 2023, 74 per cent had the same response. /TISG