NEW business formation is expected to remain subdued, while cessation numbers may pick up in the coming months as the Covid-19 pandemic continues to take a toll, said Senior Minister of State for Trade and Industry Chee Hong Tat in Parliament on Friday.
In April, about 3,800 business entities were formed, almost a third lower than the annual average of 5,500 in the same month from 2015 to 2019. There were about 3,800 business cessations, comparable to the average of 3,700 in the same month in the past five years.
But for the rest of the year, the Covid-19 pandemic "is expected to have a severe impact on many sectors of our economy", said Mr Chee.
Outward-oriented sectors such as wholesale trade will be hit by the global slowdown, air transport and tourism will continue to be badly affected by travel restrictions, and sectors such as retail and food services will be hurt by lower demand from tourists and local consumers. However, some sectors will continue to grow, such as biomedical manufacturing, as well as information and communications.
"Against this backdrop, MTI expects the formation of new business entities to remain subdued, while cessation numbers could see an uptick in the coming months," he said in response to Member of Parliament Saktiandi Supaat.
"It is not possible to avoid firm closure and retrenchments, but we will help every worker," Mr Chee added, highlighting the formation of the National Jobs Council and the launch of the SGUnited Jobs and Skills Package to help almost 100,000 jobseekers.
Mr Saktiandi had asked for the total number of business closures and formations since the start of the "circuit-breaker" period, and a breakdown of the most to least affected sectors, but these were not provided.