SMEs post sharp recovery in the second quarter

The OCBC SME Index shoots by 8.3 points to 59.5 as small and medium-sized enterprises gain momentum.

Small and medium-sized enterprises (SMEs) were resilient in the second quarter amidst the pandemic and the Heightened Alert measures.

The latest OCBC SME Index saw an 8.3 point rise to 59.5 for the second quarter, compared to the 41.2 from the first quarter. This is the second quarter that the index turned expansionary.

In a statement, OCBC said that collections across the 100,000 SMEs represented in its index grew 6% quarter on quarter, driven by improved cross-border trade with Greater China and the ASEAN.

This offset the continued drag from Food and Beverage and Business Services sectors, which were greatly affected by the restrictions implemented during the Phase 2 (Heightened Alert) period.

“The promising recovery in SMEs over the past year was supported by a rapid shift towards digitalisation and e-commerce. SMEs are also better poised to emerge from the crisis, building on the strength of Singapore as a growing hub in the post-pandemic time for the services industry, the changing supply chains and the emerging green economy,” said Linus Goh, head of Global Commercial Banking for OCBC Bank.

The continued demand for medical equipment and the vaccine rollout led to a strong performance from the healthcare manufacturing sub-industry, whose index score rose to 50.0 from the 48.1 recorded in the previous quarter.

The ICT services sub-index benefited from the demand for digitalisation, with the data processing and software development sector recording a 22% quarter-on-quarter growth in revenue collections.