3 in 10 firms in services sector to reduce headcount: SingStat survey

SINGAPORE — Close to three in 10 companies in the services sector said they are likely to reduce their headcount between April and June, while only three in 100 said they are looking to increase manpower.

This is according to a Department of Statistics (SingStat) poll of 1,500 companies in the services sector, the results of which were released on Thursday (April 30).

Among the specific segments in the services sector, food-and-beverage (F&B) companies and accommodation services were most likely to reduce hiring.

This comes as measures to contain the coronavirus causing Covid-19 begin to take a toll on Singapore’s economy.

The survey, conducted in March and April, also showed that the business outlook for the services sector from April to September has slumped, with 60 per cent predicting less favourable business conditions in that period.

SingStat carries out this survey every quarter to assess the services sectors’ business outlook for the next six months.

Here is a breakdown of the findings:

Business outlook among companies from April to September

• 60 per cent predict less favourable business conditions

• 38 per cent believe the outlook will remain the same

• 2 per cent said the outlook will improve

Companies’ forecasts on their operating receipts from April to June

• 55 per cent expect their revenue to go down

• 43 per cent expect revenue to remain the same

• 2 per cent expect it to go up

Companies’ forecasts on their required staff strength from April to June

• 27 per cent predict that they will decrease hiring

• 70 per cent said they will likely retain their headcount

• 3 per cent expect to hire more people

Segments within the services sector most affected by the Covid-19 outbreak

• F&B

• Accommodation

• Retail trade

Accommodation sector

• 97 per cent of firms expect business conditions to deteriorate from April to September owing to global travel restrictions

• From April to June, 56 per cent of accommodation services expect to reduce hiring and 90 per cent expect revenue to fall

F&B

• 96 per cent of F&B firms expect harsher business conditions from April to September. They also do not believe that demand will recover immediately after the circuit breaker measures that began on April 7 are rolled back.

• From April to June, 42 per cent of F&B firms are likely to decrease hiring and 88 per cent project a drop in income

Retail trade

• 85 per cent of retailers and those in the retail supply chain expect harsher business conditions from April to September

• Similar to F&B firms, they feel that demand may not recover after the circuit breaker 

• From April to June, 27 per cent of firms in the retail trade forecast that their headcount will be reduced and 82 per cent expect their revenue to drop 

In a statement on Thursday, a spokesperson for the Trade and Industry Ministry said that it is “not surprising” that many businesses surveyed are pessimistic about their near-term outlook as Covid-19 containment measures have had a severe impact on businesses.

“The health and safety of everyone in Singapore remain our immediate priority. The circuit breaker measures are needed to fight the Covid-19 outbreak, even though they will impact our economy,” said the ministry's spokesperson.

“If all of us play our part and we are able to successfully reduce community transmissions, we will be able to start to gradually ease up on the measures that have been put in place and reopen our economy safely.”