BUSSINESS sentiment remains bleak for the next three months due to fears of the third wave of COVID-19 and extension of the conditional movement control order (CMCO) in Klang Valley.
According to RAM Business Confidence Index (RAM BCI), nearly 70% of its respondents (from 173 firms interviewed) indicated that the CMCO had eroded their cash flow by an average of 30% to 35% to date.
“Almost 80% of the small and medium enterprises (SME) and micro firms surveyed said the Government could offer tax deductions to help their predicament but it was not addressed sufficiently in Budget 2021.
“About 65% of the respondents call for the wage subsidy programme to be continued. With another 55% calling for an extended bank loan moratorium,” RAM said.
While they lauded digitalisation schemes announced under Budget 2021, SMEs felt that it was not critical for now, adding sustaining cash flow was their top concern.
“To manage cash flow at this tough times, more than 50% of the SMEs have trimmed their workforce and slashed salaries.
“And we must remember that SMEs employ 66% of the nation’s overall workforce. Any retrenchment of workforce does not bode well for the labour market and affects productivity,” RAM pointed out.
It urged the Government to engage SMEs and micro enterprises to explore avenues on how to keep them afloat for the time being.
“We need to explore options such as targetted financial support, which will stabilise their cash flow for now.
“Once this is settled, they will be better poised to plan and execute changes to future-proof their businesses through digitalisation,” added RAM. – Dec 7, 2020.
