HALF of Singapore’s small and medium-sized enterprises (SMEs) cited increased costs and reduced profitability as a top business challenge in 2023, up from 16 per cent in 2022, according to an annual survey.
Insurance provider QBE Insurance, in the ninth edition of its survey, also reported that 40 per cent of business leaders pointed to sales growth and reduced customer spending as key issues, from 15 per cent in the year-ago period.
Other challenges highlighted were increased competition (39 per cent); staff acquisition and retention (37 per cent); and cash flow and access to funding (36 per cent), QBE said on Wednesday (Mar 6).
In 2023, SME bosses’ top business concerns included input costs (39 per cent), customer acquisition (37 per cent), long-term profitability (34 per cent) and staff costs (33 per cent).
“One-third of respondents also expressed concern for hiring and retaining staff with the required skills, experience and attitude,” QBE said.
Some 72 per cent of SMEs experienced at least one “business issue” in 2023, down from 88 per cent a year earlier.
“The most common incident that took place during the year was being ‘hacked’, where sensitive data and information were stolen via the Internet,” QBE said, with 24 per cent of SMEs having faced the issue.
A loss of income due to a business interruption (19 per cent) and being liable to others due to a problem with products or services (17 per cent) were other incidents highlighted.
For 2024, 75 per cent of SMEs expect the goods and services tax increase “to have a negative impact” on Singapore’s economy, QBE said.
Other economic concerns cited were increasing operating costs (62 per cent) and rising global inflation (62 per cent).
“Nonetheless, many SMEs maintain a favourable outlook on the economy,” QBE said, with 60 per cent of SMEs expecting an “improved” economic outlook in 2024, up marginally from 59 per cent in the year prior. Some 62 per cent of SMEs also expect an increase in sales this year, QBE added.
The poll, conducted in December 2023 and January this year, surveyed 605 local SMEs.
Source : https://www.businesstimes.com.sg/singapore/smes-cite-higher-costs-lower-profitability-top-2023-challenges-survey