Three in 10 firms expect business climate to worsen in 2021

Around 70% expect full business recovery in 2022.

Three out of 10 firms are not optimistic about the next 12 months as they expect the business climate to worsen, according to Singapore Business Federation’s National Business Survey.

The 63% of businesses surveyed reported that they have been negatively affected by the pandemic with an average decline of 31% in revenue.

Out of the sectors that reported decline, the construction and engineering industry had been the most affected with 79% reporting negative impact. They were followed by retail, real estate, hotels, restaurants, and accommodations at 73% and manufacturing at 64%.

Overseas business operations were also affected with 47% of businesses reporting contraction. The 73% said they won’t be expanding overseas for the next 12 months. With these negative effects, five out of 10 firms are saying that it would take at least one to two years for their overseas business to resume normal operations.

However despite bleak outlook, some firms remain optimistic for the coming year. Despite 32% expecting the business climate to worsen, around the same number of firms are optimistic about the next 12 months with 31% expecting improvement, significantly higher than the 8% of last year’s survey.

The 69% remained confident that they can sustain their business through 2021.

Out of all the businesses negatively affected by the pandemic, 25% expect their businesses to recover within six to 12 months. Most expect full recovery by 2022.

The survey was conducted between October and November 2020 with the participation of 1,075 companies. The topics included were the impact of COVID-19 on businesses, sentiments regarding economic recovery, and priorities and challenges for companies.