One in 2 SMEs see falling sales for next 12 months: poll

Singapore

SINGAPORE businesses appear to be bracing themselves for a slow recovery post-Covid-19, with nearly one in two surveyed in April expecting sales for the next 12 months to fall year-on-year.

Business information provider Experian surveyed more than 200 small and medium-sized enterprises (SMEs) in Singapore in April, and found that 47 per cent of them expect a year-on-year decline in sales for the next 12 months.

The transport and storage sector was the most pessimistic, registering the highest percentage (67 per cent) of SMEs with such expectations. Experian said this could be attributed to "disruptions to global supply chains as a result of containment measures being adopted worldwide".

The hospitality and F&B sector was the next most pessimistic, with 60 per cent of SMEs forecasting a drop in their sales, followed by the wholesale sector with 57 per cent.

"Domestic-facing sectors would have been impacted by travel restrictions implemented in the wake of the outbreak, leading to an evaporation in tourist arrivals," said Experian on Monday.

"This is further exacerbated by a reduction in sales to local customers as tightening social distancing measures had already reduced sales before the circuit breaker measures implemented in April, which saw the closure of non-essential businesses," Experian added.

Those sectors were also among others with the highest proportions of businesses potentially facing a cash crunch in the next six to 12 months.

According to Experian, about 74 per cent of SMEs in the manufacturing sector may not have sufficient funds in the next six to 12 months, while 73 per cent of SMEs in the transport and storage sector indicated this.

The hospitality and F&B and retail sectors tied at 70 per cent.

Overall, businesses polled said that their biggest challenges during February (when the novel coronavirus first broke out in Singapore) to April revolved around late payments from customers, cancelled orders and cash flow.

In line with government efforts to curb the community spread of the virus, a number of businesses have also had to introduce working from home (74 per cent) and temporary cuts to operating hours (50 per cent).

That said, support measures from the government - announced in three hefty Budgets this year - have helped ease some of the pressure on businesses.

Retaining employees (93 per cent), improving cash flow (83 per cent) and defraying operational costs (81 per cent) were the top uses of the support measures, based on the SMEs' indications.