SMEs gloomier about outlook in first half of 2016

OVERALL business sentiment among small and medium-sized enterprises (SMEs) in Singapore has continued to worsen for the fifth consecutive quarter, according to the latest SBF-DP SME Index report released on Tuesday.

The index, which gauges SMEs' outlook for the next two quarters, has fallen to 51.1 from 51.9 the previous quarter, the Singapore Business Federation (SBF) and DP Information Group said in a joint press release. The number indicates prospects for Q1 to Q2 2016.

This marked the fifth straight quarter of decline and the index's lowest reading since falling to 50.8 for the Q1 to Q2 2012 outlook. A reading of 50 indicates SMEs are neutral about their prospects and expect to achieve no substantial growth for the coming two quarters.

The continued slide in sentiment signals a "worrying trend" and SMEs "need to jolt themselves out of a stagnation mindset", SBF chief executive officer Ho Meng Kit said in the press release.

Roughly 3,600 SMEs across six industries were surveyed. Of the six industries, all posted sentiment readings slightly above 50.

However, five showed a sequential decline in their six-month outlook. These were commerce and trading (from 51.6 to 51.1); manufacturing (from 51.4 to 50.6); retail and F&B (from 51.2 to 50.9); business services (from 54.8 to 53.5); and transport and storage (from 53.5 to 53.1).

Only the construction and engineering industry kept its six-month outlook unchanged quarter-on-quarter at a reading of 51.7.