Business people are more pessimistic than at any time in the past three years, according to a survey out yesterday. It found that 56 per cent cited global economic uncertainty as the main challenge facing them next year, while 21 per cent pointed to higher costs. Reduced sales, foreign labour issues and a lack of financing were also raised.
The quarterly survey by the Singapore Commercial Credit Bureau polled 200 business owners and senior executives across major industries here on six indicators - expectations of upcoming quarterly sales, profits, employment, new orders, inventories and selling prices.
The index the data generates hit a three-year low of -2.93 percentage points for the first quarter of next year, down from 0.14 percentage point for this quarter.
Powermark Battery & Hardware Trading, which makes batteries for the marine and telecoms industries, is grappling with many of the issues companies are facing. The weaker business sentiment and lower oil prices have hit its revenue expectations, said accounts manager Ng Zhihan, who added that the firm is seeking to sell its batteries online to overseas markets to compensate for the decrease in revenue here.
Klique Design, another local firm, also expects demand for its interior design consultancy and refurbishment services to remain muted at the start of next year. Retail and commercial clients have been more hesitant to spend heavily due to the uncertain economic outlook, said director Lee Kia Tiow.
Commercial clients, wary of cash-flow needs, have reduced renovation work and negotiated longer payment terms. This has led Lourve to reconsider taking up certain projects.
Labour costs for carpenters hired mainly from Malaysia and tilers have also risen due to fewer young people joining the industry.
The costs involved in hiring staff for demolition work have risen by about 30 per cent in the past two years, in part due to foreign worker levies, and are now about $1,800 a month, Mr Lee said.
"(This is) equivalent to a fresh diploma student out on the market," he noted. The firm has had to pass on these costs to its customers, who can also be strapped for cash.
But some firms do not expect to be hit as hard by the weaker business sentiment. Peter's Butchery sees demand persisting as "food is a necessity of life". Even if people eat less at the restaurants it sells meat to due to economic conditions, they will end up purchasing more beef directly from it on a retail basis for home cooking, executive director Nicholas Tan said.
This article was first published on Dec 2, 2015.
Get a copy of The Straits Times or go to straitstimes.com for more stories.