Singapore CFOs Are Holding off on Overseas Expansion Amid Rising Economic Optimism

Chief financial officers around the world are the most optimistic in ten years about economic growth. Yet, the majority of Singapore finance executives are prioritizing investing at home rather than expanding overseas to take advantage of that confidence, citing political uncertainty.

These are the findings of the 2017 Global Business & Spending Outlook by American Express and Institutional Investor.

Across the globe, more than one in three (38%) Chief Finance Officers (CFOs) expect “substantial” economic expansion. This is led in large part by a surge in optimism with U.S. finance executives (69%, up from 23% last year).

Confidence among Singapore finance executives mirrors that of their global counterparts. Thirty-seven percent expect “substantial economic expansion,” the highest in seven years and only 7% foresee “modest economic contraction,” down from 24% in 2016.

With this optimism, almost all (97%) Singapore CFOs plan to spend more but their spending priorities have changed from last year; the focus is now on staying competitive locally rather than expanding their business overseas.

Political and economic uncertainty outside of Singapore are weighing on them with eight in ten (80%) of them acknowledging these as a concern deterring their investments in other countries.

In addition, 93% are likely to withdraw business activities from high-risk geographic areas in direct response to economic and or political uncertainty.

“It is pleasing to finally see optimism return after years of suppressed growth and companies appear to be ready to increase their spending” said Nigel Fox, Vice President and General Manager of Global Corporate Payments for Singapore, American Express. “What is interesting is that the survey shows that Singapore CFOs are hesitant to expand overseas in favor of investing more in their home market despite the Singapore government encouraging SMEs to enter new markets to overcome the country’s limited size with grants and funding new schemes.”

Companies are now more inward-looking in their investment plans 

Singapore CFOs’ top three spending priorities for 2017 are:

  • 93% will spend more on remaining competitive with other companies (up from 75% in 2016)
  • 77% will invest more on improving financial returns to owners or shareholders (up from 41% in 2016)
  • 63% will pursue business transformation and innovation (up from 53% in 2016)

Singapore CFOs no longer prioritize “entering new markets” among its top three business priorities for spending and investment in 2017. It has dropped to the fourth priority down from the second in 2016. In 2015, the top spending priority was to enter new markets (70%).

Companies still grappling with manpower issues

Retaining talent remains a challenge but compared to last year, hiring has slowed. Eighty-three percent of respondents expect headcount to increase in 2017 (compared to 87% in 2016) but 27% are likely to spend less on labour and headcount compared to the year before, up from 22% in 2016.

“Despite the optimistic global outlook, the struggle with hiring and retaining talent appears to have hindered Singapore companies from fully tapping on growth opportunities. As an example, the survey indicates companies are facing difficulty with finding the right sales and marketing talent and this is adversely affecting their companies’ performance,” says Fox.

The Singapore CFOs surveyed highlighted difficulty with hiring and retaining sales and marketing staff as an issue affecting company performance. This is followed by administrative and support staff (77%) and production/operating staff (63%).

However, the top priorities for hiring and retention in 2017 are:

  • IT-support talent (20%)
  • Mid-level management talent (17%)
  • Finance talent (17%)
  • General administration and support talent (17%)


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