Local firms downbeat about profitability prospects in 2015

The main challenge is higher business costs.

Local firms are expecting their net profits to decline significantly in 2015 on back of higher business costs, mounting global economic uncertainties, foreign manpower issues, and fewer sales.

The Singapore Commercial Credit Bureau latest quarterly business optimism index today revealed that net profits are expected to decline significantly to a net optimism of -5%, a massive drop from +17.14% in Q4 2014.

The wholesale sector is the least optimistic about net profits with net optimism standing at -50%, followed by transportation at net -13.64%.

The report revealed that 48% of local firms have dentified higher business costs as the main challenge for 2015, followed by global economic uncertainties and foreign labour issues, which was cited by 22% and 14% of firms, respectively.

Reduced sales was cited by 12% of firms, while 2% of firms are bogged down by lack of financing.