sbf national business survey 2014/2015
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SBF NATIONAL BUSINESS
SURVEY
2014/2015 Supported by:
Slide 2 of 25
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SURVEY OBJECTIVES
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952 SBF members responded to the survey
Industry Representation:
Services
(23%)
Construction
(19%)
Manufacturing (18%)
Trading
(18%)
Logistics & Transportation
(8%)
Banking & Insurance
(6%)
Oil & Gas
(4%)
IT
(3%)
Education
(1%)
SURVEY METHODOLOGY
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1 to 20 21 to 50 51 to 100 101 to 300 >300
2014 2013
More higher-headcount firms (>100) shared views this year
31% representation
Services (▲28%), IT (▲12%) & Oil & Gas (▲11%) registered higher increases
More in IT (▲15%) have fewer than 20 staff
CHARACTERISTIC #1: STAFF STRENGTH
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More in IT (▲10%) and Services (▲4%) generating more than $100m
Contributed by stimulus from roll out of government schemes like the Enhanced PIC
Fewer Banking & Insurance companies with larger turnover, likely due to on-going regulatory changes
such as reduction of Quantitative Easing (QE)
Business Sector
Turnover
Up to
S$1m
> S$1m to
S$5m
> S$5m to
S$20m
> S$20m to
S$50m
> S$50m to
S$100m > S$100m
Banking & Insurance 17% 31% 19% 15% 7% 11%
Construction 12% 15% 36% 17% 12% 8%
Education* - 39% 15% 31% 15% -
IT 10% 29% 33% 6% 6% 16%
Logistics & Transportation 10% 23% 26% 17% 11% 13%
Manufacturing 4% 14% 37% 22% 6% 17%
Oil & Gas 5% 15% 10% 26% 18% 26%
Services 14% 18% 33% 14% 7% 14%
Trading 7% 22% 33% 17% 5% 16%
Overall 2014 10% 19% 31% 17% 9% 14%
2013 11% 20% 28% 15% 9% 17%
CHARACTERISTIC #2: TURNOVER
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46% remained unclear of the impact from current global economy climate
More see optimism in the current global economic climate
IT register the highest increase (▲11%)
as more companies spend on productivity/
automation initiatives
Construction (▲4%) share the same
sentiments despite manpower constraints,
as level of public projects stays high
IMPACT OF GLOBAL ECONOMY CLIMATE
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Most continue to stay positive towards Singapore’s growth
Larger companies (i.e. MNC,
GLC/TLC & Local Large) are
comparably more positive
Slight muted outlook is partially
contributed by tight foreign labour
curbs and restructuring cost
CONFIDENCE LEVEL IN LOCAL
ECONOMIC GROWTH
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Manpower costs continue to trouble SMEs the most
4 in 5 affected by the high labour costs
(▲10%)
Uneven global economic performance
across US, China & Europe keeps 56%
guessing as to the overall direction of
economic environment in 2015
CHALLENGES: NEXT 6 TO 12 MONTHS
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Competition and Growth potential remained as top 2 concerns
62% affected by the strong
competition, supported by an open
market policy in Singapore
3rd highest is Reduction in Gross
Margin due to cost structure in
Singapore
Payments delay expected to
trouble more companies (▲5%)
* Option not available in previous questionnaire
CHALLENGES: SALES-RELATED
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Managing labour-related costs remains vital in sustaining profits
91% (▲3%) viewed wage cost
contributes the most to their profitability
More affected by high labour costs
(86%), a result of tightening workforce &
foreign labour quota
Rental also affecting more SBF members
this year
97% foresee higher operational
expenditure in 2015
CHALLENGES: COST COMPETITIVENESS
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Investing to Stay Productive and Cost Efficient (71%) – Remains the Key Business Strategy Moving Forward
With manpower issues looming,
42% are looking at Staff Retention/
Fill Existing Positions
24% are relooking their current
business model
* Option not available in previous questionnaire
KEY BUSINESS STRATEGIES
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* Option not available in previous questionnaire
Increasing workers’ efficiency as a key measure in combating high labour costs
54% (▲10%) are looking to
expanding workers’ capabilities
More (▲4%) intend to invest in
machinery & equipment to further
improve productivity
13% will invest in R&D
More turning to Business Consultants
(12%)
2015 INVESTMENTS PLANS
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Members’ overseas presence increased in 2014
Larger MNC and Local Large enterprises
engaged more business in overseas
All sectors are seen having an increase in
overseas presence, except for Oil & Gas
Asia tops the highest overseas presence
among members
72% (▲10%) are exploring for more
business opportunities overseas, with
51% generating up to 50% in
overseas revenue
Overseas Presence by Region 2014 2013 2012
Asia 97% 96% 94%
Europe 18% 22% 22%
Middle East 17% 18% 21%
Oceania 12% 12% 14%
Americas 12% 20% 21%
Africa 9% 9% 10%
OVERSEAS PRESENCE
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More have interest in developing countries
Malaysia sees continued strong
interest
Indonesia (53%) replaced China as
the second highest destination
Political stability and labour relation
continues to rank high as seen in
lower interest towards Thailand
(▼4%) and Vietnam (▼2%)
Top 5 Asian Countries
OVERSEAS PRESENCE
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Asian countries are gaining attention from members
Europe dropped out of the top 10, due to its patchy economic performance
Emerging markets like Myanmar (36%) and Cambodia (24%) see increased interests
Post election political stability in Indonesia helped renew interest
Top 3 Countries Venturing Into
OVERSEAS PRESENCE
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Rank
No. Key Obstacles Faced Overseas 2014 2013 2012
1 Competition From Companies Already Established in the Country 50% 55% 56%
2 Unclear Rules & Regulations 33% 32% 31%
Lack of Overseas Business Knowledge & Information 33% 25% 26%
3 Manpower Issues 28% 30% 28%
4 Compliance Issues 25% 24% 20%
5 Lack of Business Contact 21% 21% 24%
Customs Related Issues 21% 21% 18%
6 Funding 17% 11% 13%
Strong In-Country competition and lack of knowledge remains the top key challenges for our SBF members
New entrants to overseas markets need help with overseas business knowledge (▲8%)
Funding challenges also affecting more companies
CHALLENGES FACED OVERSEAS
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More than half (60%) are aware of AEC
70% believes AEC will present business opportunities
More of the Local Large Enterprises are optimistic about AEC
More knowledge sharing needs to be done on the full details of AEC with those that find it a
threat (3%)
ASEAN ECONOMIC COMMUNITY 2015
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1 in 3 has difficulties keeping up the pace of the restructuring
Manpower constraints and high costs limit ability
in Construction (40%) & Manufacturing (35%) to
keep pace
GLC/ TLC (40%) not immune to restructuring
pains
32% of SME members find the pace too fast
23% of Local Large Enterprises find the pace too
slow
Company Category Pace of Economic Restructuring
Total Too fast Just nice Too slow
SME 32% 58% 10% 100%
MNC 24% 68% 8% 100%
GLC / TLC 40% 50% 10% 100%
Local Large Enterprise 24% 53% 23% 100%
Overall 31% 59% 10% 100%
ECONOMIC RESTRUCTURING
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4 in 5 have plans to cope with the restructuring
More in Local Large Enterprises (91%), Education (92%) and Manufacturing (88%) have taken
measures to cope
Investing in staff productivity and streamlining operations stay as the key measures to address
restructuring challenges
Of concern, 12% have no counter measures
IMPACT OF ECONOMIC RESTRUCTURING
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More local staff to be hired in the near term
Net balance increase of 33% for
Full-time, and 17% for Part-time
More from Oil & Gas (54%), IT
(45%) and Services (41%) are
expecting to hire more Local Full-
time staff to address short-fall in
foreign workforce
IMPACT ON STAFF HEADCOUNT
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More have gained from initiatives introduced in 2013 budget
82% have gain from PIC
Bonus
▲31% benefited from
Corporate Tax rebate
▲28% benefitted WCS
1 in 10 failed to gain from
WCS (12%)
2013/ 2014 BUDGET SCHEMES
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New Initiatives or Enhancements
Awareness of Schemes in Budget 2014
Not aware Aware Not
applicable
Not
Answered
Extension & Enhancement to PIC Scheme 4% 88% 8% 2%
Extension of Tax Deduction on Qualifying R&D Expenditure 11% 43% 46% 9%
Extension of Writing Down Allowance for Cost of Acquiring IP
Rights 18% 28% 54% 9%
Extension of Land Intensification Allowance Scheme 23% 20% 57% 9%
Top-up to Lifelong Learning Endowment Fund 32% 26% 42% 9%
ICT for Productivity & Growth Programme 25% 39% 36% 9%
Overall 1%* 96%** 2%*** 1%****
* answered not aware of all schemes ** answered aware for at least 1 scheme
*** answered not applicable for all schemes **** did not answer this question
Enhanced budget schemes have benefited more firms 88% are aware of the enhanced PIC Scheme, and 67% of this find the scheme effective
Tax Deduction on Qualifying R&D expenditure and ICT for Productivity & Growth Programme are
equally popular
More interest and awareness needed for Top-Up to Lifelong Learning Endowment Fund & Enhancement to Global Company Partnership Programme
2014 BUDGET SCHEMES
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Enhanced Budget measures have brought more assistance to SBF members
▲14% felt that the measures are
useful this year
More in Construction (59%) &
Services (59%) sees benefits from
2014 measures as focus shifted
towards productivity adoption
measures
USEFULNESS OF BUDGET SCHEMES
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Help with reducing business costs stays as top concern (62%)
34% hope to see a more granular foreign
worker policies; especially within
Construction, Manufacturing, IT & Services
18% hope for better incentives for
capability building
17% of SMEs looking for assistance with
overseas business expansion
Concept of portable employee medical
benefits also gaining traction with members
(13%)
To help enlarge workforce, more are
hoping to tap on polys & ITE students and
attract economically inactive
* Option not available in previous questionnaire
WISHLIST FOR BUDGET 2015
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Training and retaining workers the key drive to improve overall productivity
1 in 2 chose Training & Skills
Development to improve productivity
More from Banking & Insurance (79%)
hope for more training funds
Difficulties in finding the right talent due to
manpower constraint has led to more in
Construction and IT (58%; 58%) seeing the
importance of retaining workers
WISHLIST FOR BUDGET 2015
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