OCBC SME Index: Which sectors saw improved activity in Q1?

Expanding to 50.5, the index indicated improved activity amongst SMEs for the quarter.

Despite an overall improved activity in the first quarter (Q1) of 2022, there were still small and medium enterprises (SMEs) in several sectors whose performance either worsened or did not progress during the quarter.

Based on the latest OCBC SME Index, sectors like food and beverage (F&B), education, and building and construction all got contractionary readings on the back of restrictions, labour shortages, supply chain disruption and rising prices. Overall, the index expanded to 50.5

For Q1, F&B got a 47.7 reading, education fell to 49, and building and construction slowed to 49.9.

According to the index, a reading above 50 indicates improved activity whilst below 50 indicates a deterioration relative to the same period a year ago.

F&B, which got the lowest rating, was weighed down by the year-on-year drop in collections due to due to a lower 5-pax restriction compared to eight-pax last year. 

Cash coverage also remained worse as firms with insufficient cash balances to cover six months of operations rose to 35% from 27% a year ago, the index added.

The industry, however, is expected to see a boost in activity from both locals and tourists, as domestic and border restrictions eased significantly in end-March.

Meanwhile, building and construction was weighed down by  "lingering manpower shortages, higher commodity/energy prices and supply chain disruptions, and property cooling measures announced last quarter."

Growing sectors

Due to strong cross-border trade, sectors like transport and logistics, manufacturing, and business services continued to see growth in Q1, getting a 51.4, 51.0, and 51.0 rating, respectively.

Meanwhile, Healthcare remained flat compared to the previous quarter, with a reading of 50.1