OCBC SME Index: Which sectors excelled and lagged in 1Q24?

Overall, SMEs' performance and health remained in a state of contraction with a 49.7 reading.

The performance and health of small and medium enterprises (SMEs) in Singapore slightly improved in 1Q24, according to the latest OCBC SME Index.

Despite a 0.2-point increase in its reading, SMEs remained in a state of contraction at 49.7.

“SME collections and payments grew by 1.4% YoY and 1.9% YoY against the backdrop of bumpy disinflation trends and elevated cost pressures,” OCBC reported.

Based on the latest reading, Retail (50.9), Education (50.5), and F&B (50.2) were the only industries in the expansionary territory.

On the other hand, Building & Construction (49.9) and Healthcare (49.4) turned contractionary after seeing expansion in 4Q23.

Remaining in the contractionary territory were Resources (49.9), Manufacturing (49.8), Transport and Logistics (49.7), Business Services (49.4), Wholesale Trade (49.4), and ICT (48.5).

“The OCBC SME Index is likely to remain flat in the near term before a gradual upturn towards the second half of this year. The turnaround in global electronics and a positive outlook for the ASEAN economies are expected to have a positive impact on the outward-oriented sectors in Singapore,” OCBC said.

“However, downside risks remain with sluggish domestic consumption and export growth from the Chinese market amid lingering geopolitical tensions,” OCBC added.

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