42K Businesses Shut Down In Singapore During 1H 2016

Approximately 42,000 businesses closed down in Singapore during 1H 2016, which would have also displaced many employees.

This compares to 49,000 during the entire year in 2015.

There are a couple of reasons behind these numbers, such as:

  •  Higher wages, which makes it harder for companies to remain profitable. Singapore’s wage costs are at around 43% of GDP, a level which was seen before recessions in 1985, 1997 and 2001. Also the Unit Labour Cost Index reached an all time high of 116.7 in 2Q 2016.
  • The state of the global economy and its impact on export oriented Singapore.

According to a report by Reuters, the rise in wages is partly due to the stance of lowering the number of foreign workers in Singapore. This has led to a shortage of talent in various sectors and also lower productivity.

“Anecdotally, companies are known to have hired token locals – employees needed to meet quotas so that the company can hire another foreigner,” stated Lee Quane, Asia Director at ECA International, a recruitment firm.

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