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Professional and business services fastest-moving sector
THE small and medium enterprises (SME) sector in Singapore has consolidated expectations with good performance, said publisher Business Media International (BMI), which organised this year's SME100 awards event at the Marina Bay Sands Convention Centre on July 13.
Fifty SME100 Award winners were honoured at the gala dinner. BMI said it sifted through some 400 nominees to identify the fastest-moving companies in Singapore, using an 80-20 quantitative to qualitative scorecard to assess their performances.
Highlighting its findings, BMI said the nominated companies' average revenue growth doubled to 53 per cent in 2018 from 22.4 per cent in 2017.
Significantly, the professional and business services segment is the fastest-moving industry among SMEs this year. The industry also recorded an increased representation for 2018.
"SMEs, having generated half of the nation's growth in gross value added in the past five years, remain as the key factor in making Singapore one of the strongest economies in the world. Singapore SMEs reported confidence in their annual performance, drawn from increased support by the government in Budget 2018," said BMI.
It added that the SME100 awards' judging criteria have been stringent since they were introduced a decade ago. For example, as part of the five-stage evaluation process, it implemented a 100 per cent audit mandate where 90 per cent of the nominees were subjected to physical site audits.
For every year since the launch of the SME100 awards, the professional and business services industry has been consistently represented among the top three. It remains the top industry represented in 2018, accounting for 20 per cent of all nominees.
The telecommunications and ICT industry maintained a healthy representation at 16 per cent, but only scored third-highest as it came in 1 per cent lower than transportation and logistics.
BMI said its survey and results were not able to identify the contribution of the Wage Credit Scheme to the revenue and profit of the different industries. And the disparity between revenue growth and profit growth was the result of industrial ratio.
"Average revenue growth significantly outpaced average gross profit growth, which was only at 18 per cent. This can be traced back to an increase in costs of businesses, with 42 per cent of SMEs in Singapore reporting costs as a primary threat to their operations in 2017."
Increased cost of labour was among the higher business costs, as inflation is consistently outpaced by wage growth. This significantly reduced the profit margin and the average value added per firm has decreased, said BMI.
BMI is one of Asia's leading business-to-business publishers. Its media properties include SME Magazine, HR Asia, Capital Asia and World Halal Business.
As the owner of some of the region's largest B2B media and events properties, BMI is uniquely positioned to offer business owners and senior business executives up-to-date business intelligence across the region.