SMEs expect weaker sales, profits over next two quarters

SMALL and medium-sized enterprises are looking less optimistic over the next six months due to lower sales and profit expectations.

According to the SBF-DP SME Index for Q2 and Q3 of this year, the level of business confidence among Singapore SMEs fell compared to the last quarter, with the Overall Index Score dipping from 54.4 to 54.0.

However, as a score above 50 indicates a positive sentiment, SMEs remain generally optimistic about their prospects for the next six months, said the Singapore Business Federation (SBF) and DP Information Group on Wednesday.

On the employment front, SMEs' hiring expectations increased to 5.70 from 5.52 last quarter, with the tight labour market continuing to exert hiring pressure to fill open positions.

Lincoln Teo, chief operating officer of DP Info, said the SME sentiment has been steady for some quarters, with no major event to generate either a positive or negative outlook.

"We are seeing a period of stability as SMEs build their businesses slowly. This environment is something most SME leaders welcome after the volatility of previous years," said Mr Teo.

"While SMEs toughen up to tide through the lull period during this post-festive season, anticipation of the Budget announcement might have also resulted in some adopting a wait-and-see approach."