Against the global backdrop of rising market and geopolitical volatility, companies in Singapore are taking concrete actions to make the best of potential uncertainties, said TMF Group which released results of a survey recently.
The survey polled over 1,700 companies worldwide, including 250 Singapore firms from small to large sizes, to gauge their market outlook and key actions taken to address shifts in global markets, according to TMF.
Across multiple sectors and firm sizes, Singapore companies were split on their business outlook for 2020, displaying a mix of caution and optimism, TMF pointed out,.
- US and China trade dispute: 38% believed the dispute would have a negative impact on the local economy, while32% 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 tensions30% expressed a pessimistic view for Singapore, with an equally opposing 30% expressing an optimistic view
Singaporean firms taking actions
Despite the mixed sentiments, Singapore businesses are taking actions to mitigate risks and leverage potential opportunities arising from these global developments, according to TMF.
- 38% of local firms revealed that they have increased their operations by expanding their workforce and boosting production capabilities in other countries to avoid being affected by trade disputes
- This is in conjunction with firms planning to reduce their operations in countries affected by Brexit (37%) and trade wars (34%)
- Additionally, 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
“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,” said Edmund Lee, managing director for Singapore at TMF Group. “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.”
The survey also revealed the top challenges businesses expect for the next decade till 2030.
Singapore firms identified trade wars (39%) and the global economic slowdown (34%) as immediate key challenges for home-grown businesses that operate across multiple jurisdictions.
This is followed by political and socioeconomic pressures over climate change affecting business strategies and operations (34%).
While trade tensions and the global economic slowdown will continue to be at the forefront of business concerns for the next few years, 34% of firms expect cyber-crime to become another key challenge for businesses in Singapore by 2030.