SMEs expect higher sales in 2024 but fear impact of GST hike

SINGAPORE: A recent report from QBE Singapore has revealed that six out of ten small and medium enterprises (SMEs) in Singapore are optimistic about higher sales in 2024, leading them to focus on strategic investments to navigate economic challenges.

More than half of the SMEs projecting increased sales (52%) have prioritized staff training, recognizing the importance of skilled workforce development. Additionally, 48% plan to invest in capital expenditure and insurance coverage to fortify their operations.

While 60% of Singaporean SMEs are anticipating a boost in sales, 75% expressed concerns about the goods and services tax (GST) hike, foreseeing potential adverse effects on the economy.

Other prominent concerns include a rise in operating costs (62%), global inflation (62%), escalating energy prices (52%), and a decrease in domestic customer demand (52%).

To address these challenges, 66% of SMEs are considering cost control measures, while 49% are looking to the government for support and relief measures.

Additionally, 36% are contemplating downsizing or streamlining operations, 35% aim to diversify their customer base and explore local opportunities.

Amid these efforts, 33% of SMEs are exploring international business opportunities, indicating a willingness to expand beyond domestic borders to sustain growth.