SINGAPORE: About 3,800 companies closed down in April, comparable to the average of 3,700 recorded in the same month over the past five years, said Senior Minister of State for Trade and Industry Chee Hong Tat on Friday (Jun 5).
However, business cessation could see an “uptick” in the coming months as the COVID-19 pandemic continues to put a severe strain on the Singapore economy.
The formation of new businesses will remain subdued for the same reason, he said in Parliament.
About 3,800 business entities were set up in April, nearly a third lower than the average of 5,500 seen in the same period between 2015 and 2019. The fall was across most sectors.
Mr Chee said the coronavirus pandemic is set to weigh on many sectors in the economy for the rest of the year.
This includes outward-oriented sectors such as wholesale trade, which will be adversely affected by the global economic slowdown.
Travel restrictions will continue to take a toll on the air transport and tourism sectors, while lower demand from tourists and local consumers will also impact sectors such as retail and food services, he said.
On the other hand, sectors such as biomedical manufacturing, and information and communications, will continue to grow.
Policymakers have slashed the country’s growth estimates in quick succession over recent months and are now expecting the Singapore economy to contract between 4 and 7 per cent this year. This will have repercussions for the job market, economists have warned.
“It is not possible to avoid firm closure and retrenchments,” Mr Chee said.
“These were happening even before COVID-19. But with COVID-19, we must expect the situation to worsen and these numbers to go up.”
He added that the Government “will help every worker” and pointed to the National Jobs Council, which aims to support close to 100,000 jobseekers through the implementation of SGUnited Jobs and Skills Package.
The formation of the new council was announced by Deputy Prime Minister Heng Swee Keat in his fourth Budget on May 26. It will be chaired by Senior Minister Tharman Shanmugaratnam and have representatives from the unions, industry associations and businesses.
The Skills Package will include schemes to expand job opportunities in both the public and private sectors, said Mr Chee.
It will also provide a range of traineeships for jobseekers to gain industry-relevant experience and build up professional networks, while providing skill-upgrading opportunities.