Oral reply to PQ on business closures and formations

Questions

Mr Saktiandi Supaat: To ask the Minister for Trade and Industry (a) what is the total number of business closures and formations since the start of the circuit breaker period; (b) what is the sectoral breakdown of those most affected to the least affected; (c) what is the Ministry's outlook on the business cessation trend and sectoral implications for the remainder of 2020 even as the global and domestic economies gradually open up.

Oral Answer (to be attributed to Senior Minister of State for Trade and Industry Mr Chee Hong Tat)

1. In April 2020, around 3,800 business entities were formed.  Due to the COVID-19 pandemic, this was almost a third lower than the average of 5,500 recorded over the same period between 2015 and 2019. Most sectors saw a fall in the formation of new business entities during this period.  

2. The cessation of business entities numbered around 3,800 in April, which was comparable to the average of 3,700 recorded over the same month in the past five years. 

3. For the rest of 2020, the COVID-19 pandemic is expected to have a severe impact on many sectors of our economy. Outward-oriented sectors such as wholesale trade will be adversely affected by the global economic slowdown, while the air transport and tourism sectors will continue to be badly hit by travel restrictions. Sectors such as retail and food services will also be adversely impacted by reduced demand from tourists and local consumers. On the other hand, there are sectors which continue to grow, such as biomedical manufacturing and the information & communications sector.

4. Against this backdrop, MTI expects the formation of new business entities to remain subdued, while cessation numbers could see an uptick in the coming months.  

5. Sir, it is not possible to avoid firm closure and retrenchments. These happened even before COVID-19, but with COVID-19, we must expect the situation to worsen and these numbers to go up. But we will help every worker. Senior Minister Tharman Shanmugaratnam is chairing the National Jobs Council.  The Council aims to support close to 100,000 jobseekers through the SGUnited Jobs and Skills Package. The Package includes initiatives to expand job opportunities in both the public and private sectors; provide a range of traineeships for jobseekers to gain industry-relevant experience and build professional networks; as well as increase training capacity to enable jobseekers to upgrade their skills.   

6. This is a very challenging task. There is no certainty we will succeed in creating all the jobs and opportunities in the difficult economic environment. But we will do our best. We will rally together. We will work with our tripartite partners. We will support one another, and spare no effort to achieve our goals. And we will overcome this crisis as one united Team Singapore.