Economic Recovery and Business Confidence in Singapore

There is no doubt that the COVID-19 pandemic proved to be a unique disturbance that touched all levels of human society. It also affected the entrepreneurial spirit and dampened the number of Singapore company incorporation.

Singapore businesses also suffered due to the unavoidably imposed lockdowns to control the spread of Covid 19. However, as per the national business survey conducted in Nov 2020, more than 65% of SME owners were confident about surviving the disturbance.

In March 2021, after the start of the vaccination program, the prospects are improving for the Singapore economy. It is rapidly leaving behind the double-digit 13.4% year-on-year slump of the 2Q of 2020.

As per the experts, the recovery of the Singapore economy will rely on three factors.

Picking Up of Global Economy

They expect that the increase in global economic activity will boost trade-related services. They are expecting a strengthening of wholesale trade. The demand for materials like mask and products needed to contain pandemic is still strong. Singaporean pharmaceutical companies saw robust global drug demand.

Vaccination Programs

They are also counting that the COVID-19 vaccine programs will reduce the fear factor and boost the overall confidence leading to the re-opening of international borders. Such an event will help the recovery of the Singapore aviation and tourism businesses. It will also prove to be a boon to the retail and F&B industry in Singapore.

Public Sector Construction Projects

The experts are also expecting the construction sector to shade lethargy and pick up its activities. It will be backed by public sector projects. The recovery of the construction sector will be gradual, and as per the speculations, the demand will lie between S$23-S$28 billion in 2021.

The construction demand in the private sector is also expected to peak to S$10 billion in 2021. It will be supported by developing the residential sites, industrial buildings and improvement of commercial properties.

Tapping the Domestic Workforce

The unemployment rates are high, and as per the experts, they will remain so for a time. In the light of tighter foreign worker policy, here is a chance for employers to tap the domestic workforce through training or reskilling.

The construction companies are concerned about the staffing crunch and constraints on hiring foreign workers. They will also worried about the rising material costs as the imports are affected due to ongoing lockdown restrictions in other countries.

Jobs Support Scheme

Singapore has worked its fiscal and monetary policies to fight the pandemic and its economic ill-effects. The country has expended nearly S$100 billion during this time. The amount is about 20% of its GDP.

The government introduced key near-term initiatives like the Jobs Support Scheme in 2020. It offered a measure of relief to the businesses and helped them ride through the ill-effects of Covid 19 disruption.

However, as the economic outlook is brightening, the initiatives like rental and other assistance, and loan moratoriums which helped stabilise the economy during the disruption, are being discontinued.

Recovery of the Singapore Economy

Being a trade economy, the recovery of Singapore's economy is liked with the recovery of the global economy. As per the reports, many countries are still struggling with the Covid 19 pandemic. As a result, the economic recovery will be uneven and slow. So will be the number of new startups and Singapore company registration in 2021.

The vaccination programs will also take time to complete. However, as per the experts, the uplift in business and consumer confidence will prove to be a decisive push.

SBS Consulting is a provider of Singapore company registration services. The firm, as the registered filing agent, is authorised to interact with ACRA and submit fees and documents on its clients' behalf. If you have any queries regarding incorporating a Singapore company, email us at [email protected] or call us at +65-6536 0036 for answers.