F&B out, IT in: New food business listings lose appetite on manpower woes

New F&B registrations dipped to only 4%.

As Singapore grapples with rising business costs and tight manpower, the F&B sector faces crunch time with lower recorded new business formations in 1Q.

According to a report by corporate services firm Janus, the F&B sector, which is plagued by the tight labor market dipped 5% in the previous quarter to 4% in Q1 2014.

Meanwhile, Singapore's efforts to become Asia's Silicon Valley is supported by a slight increase in the share of registrations in the IT sector.

Janus noted that the share of registrations in this sector increased from 6% to 7%.

This may be indicative of the increased demand for technical services to enhance productivity amidst a tight labor market and also the sustained share of the head office andconsultancy services sector. It may also reflect the continued good stead of the financial services sector, as these high value activities require IT resources and support.

Compared to the previous quarter, registrations in the financial services sector dipped slightly from 13%to 11%, reflecting the evolving challenges in the global financial market after the announcement of the withdrawal of the stimulus measure by the US. However, due to the quick adjustments by the Asian markets and muted aftermath, the share continues to remain healthy and it reinforces Singapore’s status as the regional financial hub.
Overall, a total of 16,190 businesses were registered in Q1 2014. The number is an 11.7% increase from the
preceding quarter and a significant 14.4% increase against Q1 of 2013.

It is quite normal for the first quarter of the year to witness a surge in business registrations with the onset of new financial year, with the popular belief of the New Year bringing new prosperity and growth. However this year the numbers were exceptionally high.

This is likely to be due to the sustained recovery signs of the global markets, Singapore’s resilience amidst news of tapering of US quantitative easing and the sustained low interest rates.

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