Perceptions of Singapore’s economy and industry situation

While the perceptions of the economy worsened in this reported quarter, the majority were optimistic of the future economic outlook. ‘Good’ ratings fell to 18%, a drop from 24% in the last quarter. Correspondingly, the ‘Good’ ratings for the industry situation was at 19%, a fall from 26% in the last quarter (see Chart 1).

In addition to the current sentiments, we also asked companies for their outlook on Singapore’s economy and industry in a year’s time. 54% thought that the future economic outlook would be better, and 45% remained optimistic about their future industry outlook.

Year-on-year revenue and manpower changes

From our survey, businesses have become more fragile financially. While two in five companies experienced a drop in revenue between Apr-Jun ’21, about half of them had not expected the revenue decrease.

In particular, the Food Services industries saw a higher proportion of companies with a decrease in Y-o-Y revenue for the first time since Apr-Jun ’20, and the sector remained pessimistic about earnings in Jul-Sep ’21. In line with our findings, 35% of micro and small enterprises in Singapore’s F&B and retail sectors indicated that their earnings had dropped by more than half since the start of the Heightened Alert period, according to the DBS SME Pulse Check Survey.

Having said that, the Business Times reported in June 2021 that micro and small enterprises in Singapore’s food and beverage (F&B) and retail sector were coping better during the Phase 2 Heightened Alert compared to last year’s “circuit-breaker”. This is also supported by our findings where the revenue decrease in Apr-Jun ’21 was less than the decrease in the same period the previous year. Specifically, 43% reported a decrease in revenue in Apr-Jun ’21, up from 41% in the previous quarter. However, 31% reported an increase in revenue, up from 30% in the previous report. In all, 57% of Singapore companies were profitable in the financial year 2020.

READ ALSO: Business Sentiments of Singapore Companies in FY21 Q1

IndSights Research also asked companies about their manpower changes. Fewer companies saw an increase in manpower in Apr-Jun ’21 compared to the previous quarter. The decrease in workforce was also higher than what companies had expected.

For the Construction and Environmental Services sectors, around half had planned to increase their workforce in Apr-Jun, but only 14% were able to do so. The various manpower plans may have been disrupted by the further tightening of border restrictions during the country’s return to P2HA.

Return to Phase 2 Heightened Alert (P2HA) measures

A majority of Singapore companies agreed that the return to P2HA was necessary. Most hoped that the P2HA measures could be relaxed after 2 weeks. In addition, compared to when P2HA was first implemented in May-June 2021, more companies now thought that the economy should gradually re-open and tolerate the daily number of COVID-19 cases as long as our medical system could cope.

Compared to the first implementation of P2HA in May-Jun’21, twice as many companies now thought that the economy should gradually reopen until the COVID-19 situation in Singapore has been resolved.

Progressive Wage Accreditation Mark

The Ministry of Manpower has accepted the recommendations by Tripartite Workgroup to uplift wages and well-being of lower-wage workers. Among the recommendations is the use of the Progressive Wage Mark as follows:

“Establish a new Progressive Wage Mark (“PW Mark”) to recognise firms that pay Progressive Wages. This will enable corporate buyers and individual consumers to purchase from these firms to support lower-wage workers’ wage increases. In addition, confer “PW Mark Plus” to firms that go the extra mile to uplift lower-wage workers holistically by advancing their well-being. Public and private sector buyers should require their suppliers to obtain the PW Mark.”

The Government is looking to accredit companies that are committed to improving the wages and working conditions of lower-wage workers with a PW Mark. This gives businesses the opportunity to distinguish themselves as a responsible and progressive employer that pays fair wages. It will also allow consumers to identify and consciously support such companies.

We found that the three key motivators for companies to be accredited are as follows:

1. Will not lead to significant additional cost to business
2. The administrative process to get accredited is minimal and fuss-free
3. Demonstrates the company’s commitment as a responsible and progressive employer that pays fair wages

Other support measures

Overall, the latest P2HA is not expected to disrupt Singapore’s economic recovery of 4 to 6 percent GDP (Gross Domestic Product) growth in 2021 – as long as “external demand remains healthy”, said Finance Minister Lawrence Wong said in Parliament in July. He shared that the support measures for the P2HA will be financed through budget reallocations, through underutilised expenditures and funds that had been set aside as a buffer.

In summary, there will be about S$2 billion of support to workers and businesses over the two periods of Heightened Alert in 2021. The measures include:

• an extension of the Jobs Support Scheme (JSS) for affected sectors
• a rental support scheme for small and medium enterprises and hawkers, who also get an additional month of rental waiver and subsidies
• an extension of the Covid-19 Driver Relief Fund
• those affected by safe-management measures can re-apply to receive a second payout under the Covid-19 Recovery Grant – Temporary scheme.

Click here for full abridged version of the findings. Participate in our future surveys to receive full reports.