Service sector under threat until March 2021

Several industries remain positive despite the latest foreboding survey results.

One out of four businesses foresee slower business conditions until March 2021 despite the easing in several circuit breaker measures in Singapore - as it prepares to enter Phase 3 of its recovery.

Several industries in the service sector still believe that the negative impact left by the pandemic will continue until at least March 2021, according to the latest business expectations survey released by the Department of Statistics (SingStat).

For example, 51% of the accommodation industry expects business to be less favorable from now until next year mostly because of low tourist arrivals due to travel restrictions. Meanwhile 45% in the real estate industry are also experiencing a downward pressure on rental rates, due to weaker demand for commercial spaces.

But despite this grim outlook, several industries in the service sector still expect business conditions to improve for the period of October, 2020 to March 2021.

The food and beverage sector, as well as retail trade industries expect better business prospects as restrictions relax and establishments resume dine-in services and in-store shopping.

Industries such as recreation, community and personal services, and information and communications also remain optimistic from now until March next year.

Drop in employment

The service sector also expects a drop in employment over the next six months.

18% of companies believe employment will drop in the fourth quarter, with only 11% expecting improvement.

Hoteliers predict a drop of 60% in employment this year, due to the slow pick up of demand.

They are followed by transport and storage, business services, real estate and wholesale trade.

On the other hand businesses such as food and beverage services and retail trade industries expect to hire more in the next months ending December, 2020, in anticipation of the upcoming year-end holidays and festive season.