SMALL and medium enterprises (SMEs) in Singapore will focus on boosting productivity as they grapple with a mixed business outlook this year, according to a survey by United Overseas Bank (UOB).
Of the 615 SMEs surveyed, 51 per cent said implementing productivity measures is a top priority.
Other top priorities included reducing costs (43 per cent) and developing new sources of revenue (42 per cent).
One way SMEs are planning to achieve their productivity goals is to increase investments in technology, which not only helps with efficiency but also enhances long-term competitiveness, said Mervyn Koh, UOB's managing director and country head of business banking, Singapore.
The survey found that 65 per cent of SMEs are already using digital solutions in at least one area of their business. Processes which have been digitalised include accounting (46 per cent), payroll (45 per cent) and marketing (38 per cent).
Looking ahead, SMEs said the top three areas where digital solutions will be implemented are expense management (24 per cent), customer relationship management (24 per cent) and sales (23 per cent).
About 88 per cent of SMEs also plan to increase their use of electronic payments this year.
Another area of importance for SMEs was sustainability, with 59 per cent saying they were looking at how to improve sustainability of their business operations, with those in the business services, infocommunications and technology, and transport and logistics sectors giving it a higher priority.
Business outlook in 2020 varied among SMEs, with 46 per cent saying they hold a positive outlook, 31 per cent stating a negative outlook and the remaining 23 per cent having a neutral outlook.
Among sectors, business services were the most optimistic, possibly due to positive growth they experienced in 2019, said UOB.
Wholesale and retail sectors, which had negative growth last year, were the least positive.
The top concerns for SMEs are the continued slowdown in global demand (23 per cent), the impact of ongoing US-China trade tensions (18 per cent) and the strengthening of the Singapore dollar (17 per cent), which SMEs worry will impact their competitiveness.
UOB's survey, conducted in late November 2019, polled 615 local SMEs with revenue less than S$100 million to understand how they plan to achieve their business objectives in 2020.