Business Sentiments of Singapore Companies in FY21 Q1
- All Industries - | 11 Jun 2021
Business Sentiments of Singapore Companies in FY21 Q1
(April – May 2021)
AN INDSIGHTS RESEARCH REPORT SUMMARY
The economic and industry sentiments of Singapore companies have improved from the previous quarter, in line with the Ministry of Trade and Industry (MTI) reports that Singapore’s GDP grew by 0.2 percent year-on-year in the first quarter of 2021. IndSights Research’s findings are similarly hopeful.
The latest survey by IndSights Research was conducted in April-May 2021, with over 1,500 business leaders from various industries: Environmental services, Food services, Logistics, Retail, ICT (Information & Communications Technology), Security, Wholesale trade, Real Estate, Air Transport, Land Transport, Sea Transport, Hotels, Construction and Financial services.
Note: The survey was concluded ahead of the Heightened Alert measures for Singapore which took effect on 16 May.
According to the International Monetary Fund’s (IMF) World Economic Outlook, the global economy looks like it is on firmer ground, but with divergent recoveries amid high uncertainty where countries continue to see variants of the COVID-19 virus, some more infectious than others. PwC’s Global Economic Watch echoes the expectations of uneven recovery across sectors, countries, and income level. Despite the faster spreading virus mutations, IMF predicts a 6 percent global growth in 2021.
In this report, we zoom in on the sentiments and expectations of Singapore companies during this period.
Outlook for the economy and industries
In addition to the global 6 percent growth, IMF’s World Economic Outlook report further shows that Asia’s growth is projected at 8.6 percent.
In April, the Ministry of Trade and Industry of Singapore (MTI) reported that Singapore’s GDP grew by 0.2 percent year-on-year in the first quarter of 2021, a reversal from the 2.4 percent contraction in the previous quarter. In addition MTI also forecasted that Singapore’s GDP is expected to grow 4 percent to 6 percent in 2021.
From our survey, we found more companies were positive about Singapore’s economic situation. Companies who rated the current economic situation as ‘Good’ increased to 24 percent from 18 percent in the last quarter. Companies that felt the current economy was ‘Poor’ dropped to 20 percent, from 29 percent in the last quarter.
Regarding their respective industry’s business situation, companies were conservative, with most perceiving it as ‘Average’.
IndSights Research’s findings is supported by the views from Barclays, who do not expect that the Heightened Alert restrictions will throw off Singapore’s economic recovery. However, it is interesting to note that some analysts also predict a worse fall-out from the recent restrictions as compared to last year’s circuit breaker. This is because the Jobs Support Scheme (JSS) this time is much more limited in scope than last year.
Year-on-year revenue changes
More companies reported an increase in actual and expected year-on-year revenues, with small medium enterprises (SMEs) feeling the most positive. 51 percent of Singapore companies reported that they were profitable in FY2020. For the period of April-June 2021, 2 in 5 companies expect year on year revenue growth.
Building a Singaporean core
More companies saw an increase in manpower in the period of January-March 2021, largely led by the optimism among the Environmental Services, ICT and Security sectors.
However, the various restrictions have put a strain on the hiring plans of many businesses. Regarding the initiative to build a Singaporean core workforce, 7 in 10 companies reported being affected by the Government’s direction.
Through IndSights Research’s industry conversations with business leaders, some shared that the tightened foreign manpower policies have made it challenging for their operations. Food Services and Hotels were most likely to be impacted by the Singaporean core and the changes in work pass policies as they grapple with employment shortages, which may have been worsened by tight border restrictions and stricter manpower hiring policies.
Jobs Growth Incentive (JGI)
The JGI was launched to support and encourage companies to hire more Singaporeans to create good and long-term jobs for locals.
Companies that were aware were more encouraged by JGI to grow their local workforce, and were also more likely to have increased/planned to increase manpower.
Find out more about JGI here.
Other hiring and training initiatives
Support for Job Redesign under Productivity Solutions Grant
This initiative is an enhancement to the current Productivity Solutions Grant (PSG) by encouraging companies to take on business transformation. Jobs can be made more productive and attractive therefore attracting and retaining good employees.
The SGUnited Traineeship allows recent graduates to gain industry-relevant work experience and networking opportunities. Workforce Singapore will co-fund 80 percent of the qualifying training allowance till 31 March 2022.
About the study
This quarter’s survey collected views from 1,504 business leaders from various industries consisting of Environmental services, Food services, Logistics, Retail, ICT (Information & Communications Technology), Security, Wholesale trade, Real Estate, Air Transport, Land Transport, Sea Transport, Hotels, Construction and Financial services, in April-May 2021.
Register HERE to participate in other upcoming surveys.
FOLLOW us on LinkedIn to stay updated with our reports, articles, and polls.
Click here for full abridged version of the findings.