SMALL businesses in the Asia-Pacific region say they are going to grow their businesses and hire more staff this year, despite the current challenging economic times.
This was the key finding of a new study of eight Asia-Pacific countries conducted by global professional accounting body, CPA Australia. The Singapore segment of the findings was shared with The Business Times ahead of its official release.
Singapore was the seventh most optimistic country of the eight markets surveyed, with over half (51 per cent) of the respondents here saying that they expect their businesses to grow in the next 12 months. Singapore ranked above only Australia, and well below Indonesia and Vietnam.
Still, the optimism was surprising, given that the survey also showed that small businesses here have lower expectations for growth in 2017 compared to other markets in the region as well as against previous findings.
Only 40 per cent of small businesses forecast that Singapore's economy would grow in 2017, down from 48 per cent in last year's survey.
Small businesses here say the greatest barriers to their growth are increasing costs, increasing competition and a poor overall economic environment; staff costs and rental costs were considered most detrimental to their business.
CPA Australia chief executive Alex Malley said the unexpected optimism around employment - given such a view on growth - may be reflective of small businesses believing that the negative outlook for growth could be short term.
"Small businesses reporting a positive outlook in hiring intentions may indicate a belief that stronger economic conditions could start to emerge in the latter half of 2017," he said.
Other results from the study showed that Singapore's small businesses have a relatively strong focus on the digital economy, especially compared to Australia and New Zealand.
Forty (40) per cent of small businesses here earn more than 10 per cent of their income from online sales, while 74 per cent use social media for business purposes.
Singapore was, however, ranked below the survey average on innovation, growing revenue from exports, the use of social media and e-commerce.
Mr Malley said the differences in results reflect both the differing challenges for mature versus developing economies and an uncertain global environment.
"Singapore's results should be considered in context of its status as an open, developed and trade-dependent economy. We would not expect to see the very strong growth reported in developing economies in Asia to be replicated in an advanced economy like Singapore."
He added that, while Singapore finds itself facing the economic growth challenges shared by many other advanced economies, the building blocks for improvement are there with the Singaporean government having a strong record of introducing measures designed to support the small business sector.
"Singapore's low tax rate, highly educated workforce and strong linkages to the fast growing economies of the region continue to make it an attractive place to do business.
"With the release of the Committee on the Future Economy (CFE) report due shortly, the (Singapore) government is showing its proactive attitude to repositioning and growing Singapore's economy for the years ahead," Mr Malley said.
This is the seventh year the CPA Australia Asia-Pacific Small Business Survey has been conducted; it provides annual insights into the views of small businesses across eight markets in the region.
Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission