DBS expects 2024 to be a year of economic renewal for Singapore, with the manufacturing, trade-related services, finance and insurance sectors emerging as key drivers of growth.
Rising foreign direct investment inflows into Singapore also represent an opportunity for small and medium enterprises (SMEs) as they stand to benefit from the transfer of new technology and innovation, as well as technical know-how and other spillover effects, arising from the foreign direct investments (FDIs).
"In addition, the anticipated softer labour market will ease wage growth, mitigating cost pressures for SMEs," experts at DBS said.
These were the insights shared at the inaugural DBS Market Outlook Series held yesterday at DBS Asia X campus in Fusionopolis. The event, which included research presented by the DBS Economics and Strategy team, as well as findings from the Singapore Business Federation, is designed to help SMEs better navigate an increasingly complex global landscape. Over 70 companies from 12 sectors attended the two-hour dialogue.
Koh Kar Siong, managing director and group head for corporate and SME banking at DBS, said: “Our operating environment, both at home and globally, is marked by uncertainty and change. The world is increasingly fractured, with an unpredictable economic landscape. Businesses are sandwiched between rising costs and managing consumers’ expectations of low prices. But amidst these challenges, there are windows of opportunity to be captured."
“Singapore continues to attract sizeable foreign investment thanks to its business-friendly environment, extensive regional connectivity, and availability of highly skilled talent. This represents a significant opportunity for local SMEs. For example, when multinational corporations diversify and decarbonise their supply chains across Asia, SMEs with a sustainable edge would be in a prime position to support this expansion. Companies that can deepen their talent pools in these areas, while leveraging digital solutions to improve productivity and scale their businesses, will be well-placed to capture growth opportunities. Underpinning this is DBS’ unwavering commitment to support SMEs across our core markets. We are committed to being more than a financial partner – we are also here to enable clients on their regionalisation, sustainability and digitalisation agendas,” he added.
DBS is committed to working with SMEs to build resilience and competitiveness in the areas of regional connectivity, sustainability and digitalisation. By leveraging DBS’ strong presence in five core markets beyond Singapore’s shores – China, Hong Kong, India, Indonesia and Taiwan – SMEs can get ahead of the curve and scale their business.
For example, on the environmental, social and governance (ESG) front, DBS has been offering a suite of financing solutions for companies to accelerate the adoption of sustainability solutions, to overcome potential cost barriers associated with such transformation. DBS launched the eco renovate loan in 2023, a financing solution that enables SMEs to borrow up to 100% of the cost of using resource efficient or energy optimisation solutions for a greener renovation.
On overseas development, Ray Kwan, director of South Asia, Middle East and Africa (SAMEA) International Business Division, Singapore Business Federation, presented findings from the recent SBF National Business Survey 23/24 which showed that although business sentiment had turned cautious, more than half of local businesses remained keen on potential overseas expansion.
"SMEs with existing ventures overseas can anticipate a stronger trajectory of business growth. Working with an ecosystem of financial and business partners with a deep understanding of overseas markets including Indonesia and Vietnam, would also help businesses better navigate uncertainties," he noted.
Chua Han Teng, economist at DBS said: "Additionally, expectations of a softer labour market point to the prospect of easing wage pressure for businesses. One significant theme to watch this year is the evolution of Singapore's labour market. As demand cools and shortfalls ease, we anticipate a softer labour market. This may result in a marginal increase in the overall unemployment rate and easing wage growth, as firms strive to manage cost pressures in the face of ongoing economic uncertainties.”
Representatives from Gprnt.ai and Infocomm Media Development Authority (IMDA) were also present to share more on sustainability and digital transformation. Liu Simin, head of product at Gprnt.ai, demonstrated how technology can help SMEs simplify ESG disclosures. Meanwhile, IMDA shared its Digital Leaders programme that supports local enterprises in digital transformation and called on businesses to harness digitalisation to capture growth opportunities.
Re-disseminated by The Asian Banker