SINGAPORE – Singapore’s small and medium-sized enterprises (SMEs) extended their growth momentum for a second consecutive quarter, according to the latest OCBC SME Index released on Oct 15.
The improvement was fuelled by broad-based growth across almost all industries, with manufacturing returning to expansion after five consecutive quarters of contraction.
The quarterly index, which tracks the business health and performance of SMEs, rose to 50.8 in the third quarter of 2024 from 50.2 in the second quarter.
A reading above 50 signals increased business activity compared with a year ago, while a score below 50 indicates a contraction.
The index is compiled from the transactional data of more than 100,000 OCBC SME customers in Singapore, each with annual revenues of up to $30 million.
In the third quarter, SME collections increased by 0.4 per cent year on year, while payments edged up by 0.3 per cent, reflecting a modest rise in operating costs.
Out of the 11 industries tracked, nearly all – except for information and communication technology (ICT) – were in expansionary range, up from seven in the previous quarter.
The manufacturing industry saw its index climb to 50.4 in the third quarter, up from 49.9 in the previous one, driven by a 9.8 per cent year-on-year increase in collections. However, this was tempered by a 6.8 per cent rise in payments.
Overseas collections and payments also surged, rising by 25.5 per cent and 40 per cent, respectively, compared with the same period last year.
“While the recovery in global electronics demand, and improvement in business sentiments and factory output bodes well for SMEs in the industry, it remains to be seen whether growth can be sustained in the near term,” OCBC said.
Domestically oriented industries, such as food and beverage, healthcare, retail, and education, continued to “see healthy