Singapore businesses in trouble due to rising costs

One in two businesses will be forced to closed if the current market condition persists

A 2022 Shop Small Research for Singapore commissioned by American Express to Kantar revealed that almost half of businesses in the country will not survive beyond six months if rising costs persist by the end of the year.

According to the same survey, the top factors that contribute to the rising costs of businesses were raw materials (42%), logistics (42%), and labour (37%).

More from OMY: SMEs able to expand ventures through Scale-up SG Programme

Meanwhile, nearly three in four business establishments are expecting their annual revenue to rise or exceed pre-pandemic levels. Among the reasons are retained cash flow (40%), customer spending (44%), increasing customer base (40%,), and online expansion (45%).

For customers, almost 57% believe that pre-pandemic spending levels will be back or even exceed past numbers.

“As pandemic restrictions ease and travel resumes the first half of this year, most businesses are optimistic and expect annual revenue to rise. However, our consumer survey shows that while consumers have resumed pre-pandemic social activity, they are approaching spending conservatively,” said Elroy Lim, general manager and vice president of merchant services for American Express, adding that the company is bringing back their Shop Small movement for the third year to do their part and reward everyone that supports local businesses.

American Express is set to expand the said offer to more than 3,500 locations throughout Singapore.

“Card Members will get S$3 back for every S$10 spent at participating businesses, up to five times, from 2 to 31 August 2022.”

In the last two years, card members have made a whopping 250,000 purchases during the one-month-long campaigns.

More from OMY: Singapore maintains a 3% to 5% 2022 growth forecast

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