Almost two-thirds of businesses in Singapore, or 63 per cent, have been negatively impacted by the COVID-19 pandemic, with revenue declined by 31 per cent on average, according to the annual survey released by Singapore Business Federation (SBF) on Tuesday (26 Jan).
SBF conducted the survey in October and November last year with the participation from 1,075 companies.
The survey result revealed that 69 per cent of companies in Singapore are confident in sustaining their businesses over the next 12 months, albeit the challenges faced in an uncertain economic triggered by the global pandemic.
About 31 per cent of companies expect the business and economic climate to improve in the next 12 months, a significant improvement from the 8 per cent in last year’s survey.
SBF found that an almost equal proportion, or 32 per cent, of firms expect the business climate to worsen, lower than last year’s 49 per cent.
“Amid the negative impact of the COVID-19 is the silver lining of a stronger push for digital transformation and manpower development by companies,” said SBS chief executive officer Lam Yi Young in a statement.
SBF highlighted the top four challenges that businesses faced amid the COVID-19 crisis, namely demand uncertainty (59%), manpower costs (52%), travel restrictions (44%), and business competition (41%).
All businesses are prioritising revenue growth, maintaining cash flow, and reducing costs to remain viable, it noted.
One in five companies said they recognised the need to streamline their businesses or operational processes, as well as attract and retain talent.
Besides that, nearly one in four companies are planning to increase the number of employees next year, while approximately one in ten companies indicated that they are planning to downsize manpower.
About 97 per cent of businesses believe that training and staff development has become more important as a result of the pandemic.
SBF noted that about 84 per cent of businesses reported having accelerated their digital transformation due to COVID-19, by an average of two years.
Meanwhile, 39 per cent of companies reported having increased their IT budgets, by an average of 29 per cent.
Companies with a high level of transformation are more confident about sustaining their business, as compared to firms with low levels of industry transformation.
The survey revealed that the most useful and relevant support measures to date have been those aimed at managing costs and those relating to cashflow management.
In the immediate term, digitalisation remained a key transformation plank for companies to reshape their businesses, identified assistance on digital transformation as a priority for Budget 2021.