SINGAPORE’S small and medium-sized enterprises (SMEs) saw a turnaround in the second quarter, entering expansionary territory after five straight quarters of contraction, according to OCBC’s quarterly SME Index released on Thursday (Jul 11).

This was led by export-oriented industries, which accounted for three out of the four industries that went from contraction to expansion.

“The turnaround story was really more in the external sector,” Linus Goh, head of global commercial banking at OCBC, told The Business Times.

The index, which measures SME health and performance, rose to 50.2 in Q2, up from 49.7 in Q1.

A reading above 50 indicates improved activity compared to a year earlier, while one below 50 indicates deterioration.

The index is derived from the transactional data of more than 100,000 SME customers – each with annual revenue of up to S$30 million – of OCBC in Singapore.