Singapore SMEs Continue to Grow Despite Economic Mishaps: Based on recent data, Singapore’s stint with Covid-19 and the ongoing inflation caused by the Ukraine-Russia conflict did little to hinder growth for small and medium-sized enterprises (SMEs) in the second quarter of 2022. The rapid economic recovery can be attributed to the proactive plan of action, a government grant for SME, and an effective response.
All industry sectors are in expansionary territory, with four coming out of contraction: food and beverage (F&B), building and construction, education, and retail.
The overall index came in at a reading of 52, up from 50.5 in the prior quarter and marking six successive quarters of expansion. Fifty and above indicates enhanced activity, while one below 50 signals a decline relative to the same period a year ago.
Q3 2022 is expected to remain expansionary as global recovery persists despite increased supply-side challenges and inflationary pressures in Singapore.
Collections increased with better performance across most industries. The quarter’s gross domestic product (GDP) Nowcast estimates GDP growth via the index – was 5.8 percent, compared to 3.7 percent growth registered in Q1 2022.
The latest Nowcast is considered “directionally aligned” with the boost in the consensus forecast of 4.8 percent in the Monetary Authority of Singapore’s survey for professional analysts in June.
Wholesale trade, logistics, transport, and manufacturing retained growth thanks to the availability of government grants for SMEs and strong cross-border trade. Transport and logistics continued expansion, led by a steadily strong showing in the logistics sub-sector. Sea and land transport saw also picked up over the quarter, partly thanks to healthy cross-border trade, while land transport became expansionary.
Manufacturing also picked up in the previous quarter, with a 14 percent increase in annual collections caused by consumer products. The innovative sub-sector also registered a healthy 12 percent increase in annual collections.
The electronics and semiconductors sub-sector dropped into the contractionary territory but is projected to improve in the year’s second half.
Due to the opening of travel borders and easing dine-in restrictions, F&B and business services benefited tremendously. Compared to the previous quarter, the F&B industry emerged from contraction, as the reduction of safe distancing measures was met with constrained demand from larger dining events and stronger visitor traffic.
The boosted momentum in digitalization drove growth in information and communications technology (ICT).
Education edged out of contraction from the previous quarter thanks to a pick-up in early childhood education and recreation classes, with the easing of Covid restrictions and an improved proportion of parents returning to office work. Training centers are expected to get momentum in the coming quarters as foreign labor resumes with the reopening of borders.
If you are an SME business owner and require additional capital to recover or fund expansion, Singapore’s government grant for SMEs through banking institutions will help. Plenty of grants, subsidies, and financial support programs are currently available. With personalized options, you’ll surely find one that fits your needs.
Considering government grants?
Entrepreneurs are also encouraged to consider SME grants Singapore offers through bank assistance. Available grants include COVID-19 Relief Loans, SME Fixed Assets Financing, Merger & Acquisition, Venture Debt Loan, Enterprise Financing Scheme Trade Loan (EFS-TL), and Project Loan.