They score 93 on a 0-200 index, gaining 23 points in 6 mths
THE business confidence outlook among Singapore's small and medium-sized enterprises (SMEs) has improved since last year but they remain cautious, a survey by HSBC has found.
The results of the Emerging Markets Small Business Confidence Monitor, released yesterday, also show that SMEs in countries with large domestic markets, such as Vietnam, are more optimistic than those in export-driven economies.
The half-yearly survey reflects the views of more than 3,400 SMEs in 12 markets. For the first time, SMEs from Latin America and the Middle East were included.
SMEs from various countries were scored on an index of zero to 200, with 200 being the highest business confidence level and 100 representing neutrality.
Singapore's SMEs scored 93 - a 23-point increase from six months ago.
This makes them 'among the least optimistic of the 12 markets surveyed', said Tan Siew Meng, head of commercial banking at HSBC Singapore. Business confidence among Asian SMEs as a whole rose to 107, from 92 in the fourth quarter of 2008.
In comparison, SMEs in Vietnam (150), India (128) and China (105) have the highest confidence levels in the region. Unlike export-reliant Singapore, Hong Kong (83) and Taiwan (98), these countries have large domestic markets to stimulate demand, Ms Tan pointed out.
Notably, only 39 per cent of Singapore SMEs are pessimistic about GDP growth, compared with 82 per cent six months ago.
In line with this, 22 per cent of them are planning to increase capital expenditures, compared to 13 per cent six months ago. Close to a quarter also have overseas expansion plans in the pipeline, with India, Malaysia and China the preferred destinations.
The recruitment plans of Singapore SMEs remain comparable to the regional average. An overwhelming 97 per cent have no plan to reduce headcount, as is the case with most SMEs in other countries.
Vietnam is once again the exception. Forty-nine per cent of SMEs surveyed there plan to add to their workforce - a proportion matched only by enterprises in Brazil (30 per cent) and Saudi Arabia (40 per cent).
Ms Tan said one reason could be that Vietnam's economy overheated earlier than most others. It is therefore 'ahead of other countries in terms of contraction measures' and is looking now to expand.
Overall, the results 'reflect the maturity level of the market in Singapore', Ms Tan said. Although SMEs here 'share the region's optimism', their more conservative business outlook means they are 'more cautious and vigilant'.
Source: Business Times, 16 July 2009
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