By Elizabeth Wilmot

SMALL and medium-sized enterprises (SMEs) here are more gloomy about the economic outlook than their counterparts across the Asia-Pacific region, according to the fifth UPS Asia Business Monitor.

The UPS survey questioned 1,200 decision-makers working in SMEs from 12 Asia-Pacific markets in January and February this year.

Some 87 per cent of the 100 Singapore SMEs probed felt that there would be a decline in economic growth this year, compared with 65 per cent regionally. Looking to their firms' prospects, 57 per cent felt they would be worse than last year, compared with 41 per cent regionally.

Ms Gillian Sim, managing director of UPS Singapore, said: 'A reason Singapore SMEs could be more pessimistic about the economic outlook is the fact that we are a small country, and we have no choice but to export and rely largely on international trade.'

The survey also looked at workforce projections for this year.

Regionally, 22 per cent of SMEs said they would be increasing their workforce this year, 65 per cent said there would be no changes, and 15 per cent said they would be retrenching workers. Some respondents ticked more than one option.

For SMEs here, just 12 per cent said that they would be increasing their workforce, 70 per cent projected no changes, while 18 per cent would be axing jobs.

Ms Sim said a key reason most SMEs did not plan changes to workforce numbers this year was that 'the Government has done a tremendous job in introducing measures to save jobs in this downturn'.

'Despite the challenging economic environment, SMEs in Singapore are in good stead to see their businesses through this difficult period,' she added.

The survey found that regional and Singapore SMEs had markedly different views on the growing role of China.

Regionally, 46 per cent saw the growing predominance of China to be a boost to business in their own countries, 21 per cent saw it as a threat, and 23 per cent viewed it as both a threat and a boost.

In Singapore, however, 75 per cent saw it as a boost and only 6 per cent perceived it to be a threat.

The percentage of Singapore SMEs viewing China's growth favourably has been steadily increasing over the years. In 2007, 53 per cent thought China would boost their business, but last year that figure rose to 63 per cent.

International Enterprise (IE) Singapore's deputy director of enterprise services group Chung Lai Thoe said: 'In 2008, China was Singapore's third largest trading partner with bilateral trade reaching $91.4 billion - a 17-fold increase over $5.3 billion in 1991.

'It is not surprising that Singapore companies, which are already well entrenched in the market, would be positive about China's continued growth.'

This article was first published in The Straits Times.