Over half of Singapore CFOs upbeat about economic outlook

Emerging markets to drive growth.

Finance executives are generally upbeat about the economic outlook for the coming months, but have comparatively more tempered expectations about their company’s performance, according to American Express’ Business Momentum Survey, which polled both Singapore and Hong Kong-based CFOs.

Slightly more than half of Singapore respondents (53%) said they expected modest to substantial economic expansion in the coming year, buoyed by a growing local economy and steady business growth. A large proportion (42%) also expected their company’s business performance to improve, with the remainder predicting current performance to stay the same (42%) or a dip (15%) in performance.

Those expecting to do better said their businesses were growing or projected to grow. A range of factors including unfavourable market conditions, business contraction, and a stagnant global economy were cited by the more cautious group.

Key challenges for businesses

Although businesses are hopeful of their prospects for the year, they highlighted several areas where they will need to focus their efforts in order to compete.

These include industry competition (84%), currency volatility (76%) and labour cost (67%). Improving current products and services was at the top priority for almost a quarter (22%) of respondents. Also high on the list was a focus on developing new products, when finance executives look at tackling the competitive environment.

A number of finance executives also cited emerging markets as important drivers for growth. This is particularly important within Asia, as the top five emerging markets for CFOs in Singapore are in this region:- Indonesia (40%), Vietnam (25%), China (24%), Malaysia (24%) and India (16%).

“With companies here so reliant on emerging markets for growth due to our proximity to these booming economies, it is important for CFOs to gain a thorough understanding of the business environment and cultural norms of doing business abroad, and to be aware of the potential pitfalls, so that they can maximise opportunities to steer their companies forward to bolster and sustain growth,” said Melanie Cochrane, American Express Senior Vice President of Global Corporate Payments, for the Asia-Pacific region.