- 2016 was a bad year for major businesses; 2017 is predicted to be worse.
- There are a number of factors contributing to the growing deterioration of economy.
Local businesses as well as big companies in Singapore barely broke even in 2016. To make things worse, Singaporean economy is looking at zero silver linings as far as 2017 goes.
The less-than-delightful scenario in Singapore could spell the fate for most global economies heavily depending on foreign export.
The sectors worst hit this year were real estate, retail and construction. From a change in policy to current customer demographic, every factor plays a crucial role in the failure of Singaporean businesses.
It is getting harder to retain younger workers, with labor costs sky-rocketing at present. Salary expectation of the youth is increasing by the day. This makes it harder for companies to employ workers for prolonged work hours.
Availability of young workers is also a persistent problem, since the key demographic of Singapore is changing.
“The reality is that our country is high-cost, and we have many limitations, including our land and an ageing population. So I urge consumers to change their expectations. It’s not just about businesses complaining about the problems they have – we cannot forever open the floodgates,” said SBF chairman SS Teo, reported Channel News Asia.
The lack of stable governmental policies also affected the smooth growth of businesses in Singapore. At least 10 companies cited unreliable policies as reason for the poor profit margins this year.
Foreign worker’s policies also worked against the failing economy of Singapore, especially since it is an outward-oriented economy
“Domestically, high operating costs and the constraints imposed by our foreign worker policies continue to affect businesses. Businesses find operating under this persistently tepid global and domestic economy challenging,” said SBF CEO Ho Meng Kit.
Budget planning this year has been termed not “far-reaching enough, and do not have significant near-term impact.”
The government has also laid down suggestions for companies to transform themselves in the coming years. Needless to say, it is something that has not been well-received by the companies.