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Fewer small and medium-sized enterprises (SMEs) are expected to increase their headcount in 2014.
The latest SME index, conducted jointly by the Singapore Business Federation and DP Information Group, indicated a decline in expected SME recruitment rates for January to June 2014.
“Hiring expectations fell from 5.69 last quarter to 5.55 this quarter,” the report said.
The study, which concluded findings from 3,000 interviews with SME owners and managers in Singapore, attributed the decline in hiring rates to a leaner labour market.
“One area SMEs expect to be less active is in making new hires,” Chen Yew Nah, managing director of DP Information Group, said.
“This is partly an adjustment to a tighter labour market where SMEs are struggling to get the best talent and working on productivity improvements to reduce dependence on labour.”
On a more positive note, the study also highlighted high levels of business confidence levels for SMEs in the year to come.
“The overall index for this quarter rose 0.5% to 55% – the highest score since Q3 of 2011. A score above 50% indicates that SMEs have a positive outlook for their business prospects for the next six months,” the report said.
“The commerce/trading sector (56.1%) is the most optimistic which indicates enthusiasm for an increase in regional trade throughout the first half of the year,” Chen added.