You are here
German firms upbeat on S'pore: poll
THE seven German Chambers of Commerce and Industry (AHKs) in the Asean region which make up the German Asean Chamber Network (AHK Asean) and comprise members from Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, conducted the Asean Business Climate Survey 2015 among their member companies in May 2015 for the third time.
The questions focused on business confidence, growth expectations, investments and company indicators comparing the current situation with the past year and forecasts for the year ahead. In addition, respondents were asked about their views of the overall economy in their respective countries.
A set of questions on the availability of qualified staff was also part of the survey.
The respondents were mainly from the services and the machinery, electrical equipment and engineering sectors, and subsequently the chemical, automotive, manufacturing sectors as well as the food industries, including health and supplements.
Close to 300 companies participated in the poll. The aim of the survey was to give the AHKs a broader picture of their members' businesses in the region, economic developments, the companies' situation and outlook as well as the importance of various factors of doing business in the Asean region and in Singapore.
The results of the survey, both for the region and Singapore generally, paint an optimistic picture. Most participating companies in Singapore and Asean view their current situation as stable and expect it to remain this way in the near future.
"The overall situation is positive and characterised by a continuous stability," says Wolfgang Huppenbauer, president of the Singaporean-German Chamber of Industry and Commerce (SGC).
Among the survey's key findings in relation to Singapore, companies perceive the Republic's general situation to be stable and positive. In addition, most describe their company's situation as satisfactory or good.
In terms of staff numbers, German companies in Singapore kept these at the same levels or increased them over the last year.
While the absence of corruption and the availability of skilled labour are highly important factors for companies' engagement in Singapore, there is still a shortage of qualified technical staff.
Commenting on the results of the survey, Tim Philippi, SGC executive director, says: "Singapore is a very welcoming place for German companies to establish and run a business. Especially the absence of corruption and the availability of skilled labour are highly important factors for an engagement in Singapore. Nearly half of the companies plan to increase their staff numbers during the next 12 months although the survey showed that there is still a shortage of skilled labour, particularly in the technical field."
Drilling down to the detailed results, 53 companies from Singapore participated in the survey and they were mainly from the service sector (38 per cent) followed by the machinery, electrical equipment and the engineering industries (25 per cent) and the chemical sector (8 per cent).
Mostly, companies perceive the country's general situation as stable and positive
The vast majority of participants stated that the present overall economic situation is satisfactory (53 per cent) or even good (45 per cent). Only 2 per cent regarded it as bad.
Compared with the same period last year, 64 per cent stated that the overall economic situation is about the same, whereas 9 per cent replied that it is better. However, 27 per cent regarded the overall economic situation as worse than last year.
Looking ahead, the participants do not expect much change. More than two-thirds of the participants foresee that the overall economy will be the same 12 months from now while 18 per cent expect the situation to be worse and nearly 10 per cent believe it will be better.
The majority describes their company's situation as satisfactory or good.
Of their own business conditions, 51 per cent rated the overall situation as satisfactory and 37 per cent said the overall situation was good. Compared to last year, most participating companies indicated that their situation is about the same (61 per cent) or has improved (23 per cent). However 16 per cent felt that their individual situation is not as good as it was 12 months ago.
In the short term, the majority of the companies assume that their situation will remain stable (54 per cent). But 29 per cent of the participants expect that their situation will improve within the next 12 months while 17 per cent think it will be worse.
In terms of staff numbers at German companies, most are expected to stay the same or increase.
About half of the companies replied that their workforce has remained the same in the past 12 months and also will not change in the coming year.
However, 37 per cent of the companies said they have increased their workforce since last year and 40 per cent said they will increase their workforce during the next 12 months. Only a few companies reduced the workforce last year (15 per cent) or expect to do so in the near future (14 per cent).
In terms of policies and regulations, the survey is an affirmation of the functional and favourable administrative environment provided by Singapore. The absence of corruption (73 per cent), the availability of skilled labour (71 per cent), the tax framework (51 per cent) and hardly any administrative hurdles (49 per cent) are stated as highly influential or highly important to the companies' engagement in Singapore.
Predictably, the companies also highlighted the importance of regional and international markets relative to the Singapore market.
They indicated that regional demand (62 per cent) and international demand (56 per cent) were more important than the domestic market (26 per cent). Foreign suppliers were perceived as slightly more important than domestic suppliers.
FREE TRADE PACTS
Companies are also looking forward to the Asean Free Trade Area (Afta) with the majority of the participating companies ranking it as medium important (59 per cent) or very important (27 per cent).
The EU-Asean Free Trade Agreement is also seen as an important factor with companies ranking it as medium important (46 per cent) or highly important (32 per cent) for their activities in Singapore.
On the human resources side, however, some deficiencies were found. A lack of technically qualified staff was seen as an issue and as a result, professional training is seen to be in high demand.
The survey found that companies had difficulties getting technically qualified staff regardless of educational qualifications. While non-technical staff is easily available, the companies indicated that they found it hard to get trained technical staff, with 53 per cent of the companies rating it as highly difficult to find technically educated staff at the university level and 47 per cent saying the same for the vocational level.
This, however, is an improvement from the previous survey in 2014, when 67 per cent rated availability of both types of staff as highly difficult. While there has been a slight improvement compared to last year, it shows that there are still further enhancements needed.
The majority of the participants (89 per cent) offer in-house training programmes while 54 per cent offer training programmes conducted by external providers.
When asked if they would participate in a dual vocational training programme based on the German model, 74 per cent of the companies replied that they would.