Formation and cessation of business entities are important indicators of economic health and inherent parts of economic restructuring. Notwithstanding the challenging business environment in 2020, most sectors have seen net firm entrance, although the size of net formation varies across sectors. This week’s chart describes the disparities in net business formation across selected sectors in Singapore.
- In Q1, traffic restrictions took a toll on transportation & storage sector, as the number of firm closures far outpaced that of firm creation.
- After the implementation of Circuit Breaker in early April, the number of firms in the transportation sector continued to drop. At the same time, lower demand from tourists and local consumers impacted the F&B sector. There was a net decrease of 35 entities in F&B service activities, which include restaurants, cafes, food caterers, food kiosks, and bars.
- Sectors such as wholesale and retail trade have seen a strong growth during the Circuit Breaker, as most shoppers stayed at home to minimize social interaction. The trend of working from home also encouraged robust company formation in the professional, scientific & technical activities sector.
- Restrictions on economic activity were widely eased in Q3, as most lockdown measures were been relaxed. In the post-Circuit Breaker months, the F&B sector saw moderate recovery and started to draw entrepreneurs. At the same time, wholesale and retail trade continued to grow.
- Looking ahead, the outlook for business entities is expected to improve and continue to contribute to the competitiveness and dynamism in Singapore.
By HUANG, Yuting