Only 1 in 4 businesses confident for economic improvement in 2024: poll

Manpower cost becomes the main factor of increased business costs.

In 2023, local business sentiment weakened with only 25% of businesses confident that the economy will improve in the next 12 months, according to the National Business Survey 2023/2024 by the Singapore Business Federation.

Businesses faced challenges including increased business cost (58%) with manpower cost being the main factor (75%), followed by cost pass-through from upstream suppliers (58%) and higher utilities cost (56%).

Over 8 in 10 or 83% of businesses were also impacted by interest rate hikes and the increase in the cost of funding. 46% also faced a slight to severe credit crunch.

This credit crunch affected sectors including construction and engineering (63%), wholesale trade (39%), and retail, real estate, hotels, restaurants and accommodations (47%).

However, businesses still continue to invest in their workforce with 42% of businesses planning to increase employee salaries and 26% planning to hire more the following year.

In addition, businesses are prioritising the provision of competitive salary and benefits packages (72%), professional development and training (43%), and providing hybrid work options (35%) to retain and attract local talents.

In 2024, businesses urge the government to provide more support for ESG transformation, AI adoption, and the mitigation of overseas expansion risks.

2024 is also expected to be more challenging due to domestic and international headwinds.

9 in 10 businesses acknowledged the importance of business transformation with the top 3 focuses being operational processes (70%), products and services (68%), and customer experience/service (66%).