8 out of 10 SMEs struggle with rising business costs: SCCCI

And almost half are facing thinning profit margins.

Big corporations always hog the limelight when it comes to the effects of economic restructuring. But small and medium enterprises (SMEs) also bear the brunt of the change, and a survey conducted by the Singapore Chinese Chamber of Commerce and Industry revealed just how much small entrepreneurs are affected by the restructuring.

In a speech at the 16th SMEs conference and 17th Infocomm Commerce Conference yesterday, SCCCI President Thomas Chua revealed that 83% of survey respondents declared they were facing the pressures of rising business costs, while 46% stated they were facing the risks of declining profit margins.

“This percentage saw an increase of 8% over the same period last year. The most crucial contributing factors behind the rising operating costs consist of escalating manpower, land and rental costs,” he stated.

Faced with restructuring woes, local SMEs are beginning to find ways to improve their productivity. The survey also revealed that 90% of surveyed SMEs have already adopted productivity measures.

Among these measures are enrolling their workers in skills training courses (53%), while 42% have either acquired automation equipment or are utilising infocomm technology in their business.

More SMEs have also applied for government grants. 73% had applied for government assistance schemes, an 18% increase over the previous year. Out of the government assistance schemes, the Productivity and Innovation Credit (PIC) was the most well-utilised, noted Chua.

“The mindset of local business owners vis-à-vis economic restructuring has already achieved a certain breakthrough. They are responding realistically and doing whatever they can under the circumstances,” he stated.

The SCCI's survey had 645 respondents, with 97% being SMEs from the services, construction and manufacturing sectors.