Singapore SMEs – what are they worried about?

The majority of small- and medium-sized enterprises (SMEs) in Singapore are optimistic about their business and the country’s economic outlook but remain cautious of several factors, such as the impending hike in goods and services taxes (GST), a survey by QBE Singapore revealed.

The eighth edition of the insurer’s annual business survey highlighted that 55% of SMEs reported having increased sales in 2022, with 58% expecting further increases in 2023. The survey was conducted in the fourth quarter of 2022 and had 416 SME decision-makers in Singapore as respondents.

Optimism in the country’s economic performance was also strong, with 59% of SMEs polled saying that the economy improved in 2022, and 59% were expecting economic conditions to improve for the upcoming year.

Rising inflation was the top concern, cited by 75% of SMEs surveyed. A related factor – increasing operating costs – was mentioned by 65% of respondents. In third place was the upcoming GST increase at 63%.

In response to these economic challenges, the survey said that 43% of SMEs are looking to the government for support and relief, up by 11% from 2021. Among other responses, 73% of the SMEs polled said that they would resort to cost control measures to mitigate worsening economic conditions, while 44% are planning to downsize or streamline their workforces as a countermeasure.

“Our yearly survey is conducted to ensure we have our finger on the pulse of our local SMEs at all times,” said Ronak Shah, CEO of QBE Insurance Singapore. “We are heartened to see that SMEs are largely feeling positive heading into 2023 and are ready to shift into expansionary mindsets for their businesses, especially as we head into yearly budget debates where policies concerning them are being discussed. We will continue to be on hand to support their growth plans with sound risk management strategies and policies.”