United Overseas Bank (UOB) announced that small- and medium-sized enterprises (SMEs) plan to focus on boosting productivity as they grapple with a mixed business outlook this year, according to a survey by the Bank. After implementing productivity measures (51%), their other top priorities for 2020 include reducing costs (43%) and developing new sources of revenue (42%).
Their emphasis on ensuring profitability is set against varying expectations for the year ahead. Just under half (46%) of the 615 SMEs surveyed said they hold a positive outlook for their business for 2020. In contrast, one in three SMEs (31%) said they have a negative outlook, while the remainder of SMEs are neutral.
The top concerns driving sentiment in 2020 are the continued slowdown in global demand (23%), the impact of ongoing US-China trade tensions (18%) and the strengthening of the Singapore dollar, which SMEs worry will impact their competitiveness (17%).
When looking across sectors specifically, companies in the business services sector are the most optimistic about their outlook in 2020. This may be due to the positive growth they experienced in 2019. On the other hand, those in the wholesale and retail sectors have the least positive outlook, given the negative growth in the sector last year.
Mr Mervyn Koh, Managing Director and Country Head of Business Banking, Singapore, UOB, said, “Our survey results indicate that factors such as trade tensions are weighing down on SMEs’ outlook. As such, they are focused on prioritising productivity improvements for better performance against an uncertain macro environment. One of the ways SMEs are planning to achieve their productivity goals is to increase their investments in technology, which not only helps with increasing efficiency but also enhances their competitiveness in the long term.”