Across 250 Singapore firms ranging from small to large sizes, companies were split on their business outlook for 2020, displaying a mix of caution and optimism. There was almost an even split between those expressing concern and those seeing opportunity from international developments such as:
- US and China trade dispute 38% believed the dispute would have a negative impact on the local economy, whilst 32% believed it would have a positive impact
- Brexit 32% considered Brexit as a risk to the Singapore market, in contrast with 30% who considered it an opportunity
- US and EU trade tensions 30% expressed a pessimistic view for Singapore, with an equally opposing 30% expressing an optimistic view
The results were shared in TMF Group’s latest survey which found that Singapore businesses are taking actions to mitigate risks and leverage potential opportunities arising from these global developments.
These actions include increasing their operations by expanding their workforce and boosting production capabilities in other countries to avoid being affected by trade disputes (38%). They're also planning to reduce their operations in countries affected by Brexit (37%) and trade wars (34%).
Additionally, one-third of Singapore businesses surveyed (33%) said that they have plans to restructure parts of their business, such as modifying their supply chains in order to avoid the risk of trade disputes.
Edmund Lee, Managing Director for Singapore, TMF Group noted that while Singapore ranks as one of the easiest places to do business in Asia, its open economy pegs its growth prospects closely to the external environment.
"Geopolitical issues may present opportunities for local firms that are well-prepared and have robust strategies. A particularly relevant issue closer to home is how the volatile socio-political situation in Hong Kong is spurring business prospects in Singapore."
Given the external environment at the moment, the top challenges businesses expect for the next decade till 2030 are trade wars (39%), global economic slowdown (34%), and pressures over climate change affecting business operations (34%). Another one-third (34) also expect cyber-crime to become another key challenge for businesses in Singapore by 2030.