7 in 10 local SMEs expect a recession within the next 2 years

In response, SMEs are taking a prudent approach to their financial spending.

Small and medium enterprises (SMEs) in Singapore remain cautious about the global economy, with seven in 10 even bracing for a potential recession within the next two years.

According to a survey conducted by Airwallex, rising costs continue to hammer local SMEs, with two-thirds saying it is amongst their top three pain points.

SMEs are particularly concerned about rising costs from suppliers (35%), employee costs (30%) and logistical disruption costs (23%).

“The challenges identified by SMEs in the survey findings are consistent with what we have been hearing from our customers, with rising costs and ways to manage it being a consistent theme in conversations,” said Low Cher Hao, director of SME and Growth, Singapore, at Airwallex.

To optimise their operations amidst an increasingly uncertain environment, SMEs are taking a prudent approach to their financial spending.

Nearly two-thirds of SMEs are looking to reduce business spending and/or optimise operations through technology in the next 6-12 months. 

SMEs are also focusing on improving efficiency (42%), growing revenue (40%), and market share (33%).
 
Some are relying on fintech and digital platforms to support activities amidst the uncertain economic situation.

Airwallex said more than nine in 10 SMEs have already adopted or are planning to adopt digital or fintech solutions to support their businesses' financial needs.