Business climate slumps, but SG still beats China as better business prospect
Despite slow business sales in the region, most companies are choosing Singapore as a place with better business prospects over the next one year, as compared to China and Vietnam, according to the Business Times-Singapore University of Social Sciences (BT-SUSS) Business Climate Survey.
The looming trade war between the US and China fueled a sentiment of fear and uncertainty among international businesses. It is precisely why more and more businesses are becoming increasingly cautious about predicting growth.
The futuristic outlook over the next six months looks bleak as companies project a slower business performance until the end of March and reported a dive in performance in the third quarter. Business prospects were down 18 points to negative 3 percent, according to the study. Moreover, sales net balance decreased by seven points to negative 1 percent in the third quarter. However, as compared to Q3 of 2017, the situation is better. Last year the business outlook was negative 9 percent.
On the other hand, companies expect better growth pace from overseas markets because the net balance was 4 percent. Singapore continues to remain a popular choice for companies to build their businesses. China and Vietnam tied as the second best choice by the respondents while Indonesia failed to make it to the top three for the first time in about 11 years.
Singapore’s free-trade agreements with major economies in the world such as the US, China, and the EU make it a desirable choice for businesses who want to diversify their supply chain management systems.
Trading terms of Singapore
While companies are looking to relocate and expand in the Asia Pacific region partly because of global trade tensions between the US and China, Singapore remains friendly and on cordial trading terms with all the major stakeholders. It is precisely why this city-state is regarding as a welcome home for many such businesses, especially in the manufacturing and consulting sectors.
Better business prospects in a particular region many times translate into expansion and growth of companies in that particular area. If more companies choose Southeast Asian nations such as Singapore, Vietnam, and Indonesia as the place to do business from, it is likely to lead to more job creation and mobility of labor in the region.