ECONOMY | Staff Reporter, Singapore

SME optimism crashes to all-time low as economic outlook crumbles

Businesses don’t expect growth in the next six months.

Small and medium enterprises (SMEs) in Singapore do not expect to achieve any growth over the next half year, with business sentiment hitting an all-time low in the latest SBF-DP SME Index.

The overall index score fell 1.1 points to 50.0, marking the first time that overall sentiment turned neutral after six straight years of consistent optimism.

The score of 50.0 is the lowest score since the Index was first published in the first quarter of 2010.

“The convergence of domestic factors such as low economic growth and rising business costs, as well as global headwinds such as heightened volatility in the financial markets and a slowdown in the Chinese markets have impacted SMEs in Singapore,” said Ho Meng Kit, CEO of the Singapore Business Federation.

Both the Turnover Expectations and Profitability Expectations indices from the SBF DP Information SME Index for Q2-Q3 2016 registered weaker quarteron-quarter readings, reflecting the current state of the business health in Singapore.

“Signs of strain have been surfacing – the latest of which being the consecutive yearlong fall in manufacturing output. While finding ways to cope with domestic pressures, Singapore’s SMEs are also acutely attuned to the state of the global economy. As Singapore is one of the world’s most open economies, the slowdown in global growth can be felt across all industries,” said Lincoln Teo, Chief Operating Officer of DP Information Group.

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