It has been almost 2 years since Covid-19 devastated our economy. We are on the road to recovery and here are the current economic trends in Singapore as well as what it means to businesses.
Economic Trends
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Consumer prices in Singapore increased rapidly last month as the rates of energy and gas, food and housing rents increased sharply. Overall inflation jumped year-on-year from 2.4 per cent the month before to 2.5 per cent in September.
Meanwhile, from 1.1% in August last month, core inflation, which does not include household and private road transportation expenditures, rose to 1.2%. As a result of the greater increase in households’ average electricity usage and costs under the open electricity market, energy and natural gas costs went up by 9.9% in September, compared to 9.7% in August.
As prices for uncooked meat and ready meals increased at slightly quicker paces, Food inflation increased by 1.6 per cent, up from 1.5 per cent in the previous month.
Retail and other commodities costs decreased by 1%. Lower personal inflation and a higher decline in the price of non-sustainable household products largely compensated for the smaller fall in prices for apparel and footwear.
MAS has tightened its currency policy sooner than anticipated on Oct 14 by anticipating rising inflation and aiming to ensure medium-term price stability.
For local consumers, the move means inflation may not rise as high as it could as a stronger Singapore dollar may partly offset the rising costs of imports.
What it means for businesses
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As the Covid-19 situation in Singapore stabilizes, “consumer demand should be raised, allowing more company costs to accumulate at consumer prices,” said MAS and MTI. Wages have also been raised and are expected to increase steadily as the labour market sluggishness disappears.
SMEs need to analyze their spending and invest in technologies to provide them with an insight into educated financial decisions
Now is the time for SMEs to accumulate some cash so that they can use it to invest in tech for long terms gains. This investment must be an educated decision which is often assisted by consulting firms
Wages increase are to be expected by SMEs. We do not want to end up like the US where “The great Resignation” took place and many employees quit their job because there was no purpose in the job. It is time to relook the package for employees and also think of a vision for the company if u haven’t yet come up with it.
The bulk of the increase in electrical usage *likely* comes from computer/screen time, there have been up to a 16% increase in digital time as people mainly are working from home. This means that digital channels are to be more optimized.
Brands selling items/services that deal with home productivity should also position themselves for increased demand, with the condition of good marketing/branding. The cost of uncooked food also has gone up probably because of shortages and lack of supplies due to the Covid situation.
Remember to always enjoy a meal with your family. We’ve found some good deals for online groceries, such as this.
With MAS strengthening the SG dollar, importing of goods and services will become cheaper for companies and it is worth considering outsourcing administrative tasks given this trend.
Watch out for cyberattacks for SMEs going digital
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As analyzed, it is not surprising that the message is for SMEs to not delay their entry/investment into technology and digital channels. However, while there are considerable practical advantages in a digital future, these projects also present a suite of disadvantages.
Every new internet and hardware connection gives an option for attacking hostile individuals. The predicament of cyber-attackers who exploit concerns and confusion caused by the epidemic was further aggravated by COVID-19. A frequent approach of attacking a server with a host of requests is by using Distributed Denial-of-Service (DDoS). DDoS can paralyze companies, particularly as they rely on online services.
Small and medium-sized companies often lack the infrastructure to respond appropriately in their belief that they are never targeted. However, the scale of a corporation no longer represents a risk indication. SME owners should therefore consider integrating their internet provider’s automatic DDoS detection service.
In the final analysis, it is crucial that small and medium-sized enterprises are not left behind as consumers and countries become increasingly known and familiar in the digital realm.
Overall Message
With the tips and information above, SME owners can look towards embarking on their digital transformation journey to help them through the pandemic and future-proofing their business for the new digital future.
We wish you all the luck!