TODAY Singapore. English., © 2010 MediaCorp Press Limited
Businesses in Singapore are cautiously optimistic about their business prospects this year and expect to rake in better-than-expected profits.
This is according to the findings from an inaugural joint survey conducted by the Singapore Business Federation (SBF) as well as 15 foreign and local chambers of commerce.
Of the 307 business owners and senior managers polled last December, 62.2 per cent said they expected 2009 to be profitable. About 70 per cent indicated that their business will generate returns for 2010.
As global economic recovery continues to take shape, more business owners said they expect growth, and that they will be making investments this year.
About 69.7 per cent of respondents said their business will grow between 1 per cent and more than 10 per cent this year, while 15.3 per cent expect minimal growth. Eight per cent said that they are not expecting any growth.
As a further sign of good times, 56.7 per cent of the firms are also looking to hire new staff, compared to the 2.3 per cent who plan to retrench and 11.7 per cent who were unsure about their company's employment and retrenchment plans.
Industry experts reckoned that the government's stimulus measures have been timely and effective during the downturn, resulting in positive financial expectations for businesses.
The $4.5-billion Jobs Credit, for instance, has encouraged the retention of talents and spurred greater productivity among businesses, said Mr Terry O'Connor, president of the British Chamber of Commerce Singapore.
Another factor is "the Risk Sharing Initiative to facilitate bank lending to companies and the Spur programme to enhance skills upgrading and resilience," said Mr Teng Theng Dar, SBF chief executive officer.
Increased government expenditures have also propped up some businesses, said Dr Wilson Chew, group principal consultant and chief executive officer of branding specialist firm StrategiCom.
While companies remain optimistic about their business prospects for 2010, uncertainties about the economy also linger.
About 43 per cent of respondent said economic outlook will be average, while 41.7 per cent said they were optimistic. Around 15.3 per cent expressed pessimism.
Companies said that the uncertain economic environment, rising competition and increased operating cost as the main challenges for business this year.
For many firms, the upcoming Budget announcement will be a good indication of how the government will support new initiatives and innovations, said Mr O'Connor.
In the survey's Budget 2010 Wishlist, companies said they hope the government will help reduce business cost through tax and rental cuts.
Some respondents expect the government to help minimise manpower costs via levy reduction and assistance in training cost. Others hope to get funding for technology initiatives.
As economic recovery remains fragile, business owners should instead focus on building their capabilities at this time. This involves innovation in people, process and products or service, said StrategiCom's Dr Chew.
Such measures will make sure businesses would be more than prepared to ride the next wave when recovery returns, he added.
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