New survey reveals rising economic concerns despite broad support for Singapore Budget 2025.
Business sentiment across Singapore has weakened notably amid mounting economic uncertainty, according to findings from the Singapore Business Federation’s (SBF) latest National Business Survey 2025 – Singapore Budget Edition. The number of businesses expecting the economy to deteriorate over the next year has nearly doubled to 40%, up from 22% in Q4 2024.
This year’s survey introduced the inaugural Business Sentiment Index (BSI), which recorded a reading of 56.5, suggesting modest optimism but also revealing caution among firms. The decline in confidence was more pronounced among small and medium-sized enterprises (SMEs), with 41% of them anticipating worsening conditions.
Cost pressures remain a significant concern, particularly for sectors such as hospitality and real estate. The survey’s Cost Expectations Index stood at 68.0, with respondents highlighting higher labour, energy, and financing costs as key operational challenges. The rising cost burden is coupled with growing difficulty in accessing financing—about one in four businesses reported experiencing a credit crunch.
Despite the challenging outlook, the survey found broad approval of Singapore Budget 2025. A majority (92%) of businesses were either satisfied or neutral, with firms welcoming initiatives like the 50% corporate income tax rebate and the SkillsFuture Workforce Development Grant. However, many also expressed a need for greater support, particularly in the form of financing tools and incentives for innovation and transformation.
SBF Chief Executive Officer Mr Kok Ping Soon commented that the latest findings underscore the urgency for businesses to continue transforming their operations. He stressed the importance of strategic investments in digitalisation, sustainability, and workforce development to remain resilient amid an uncertain global environment.
Looking ahead, SBF has committed to working closely with government and industry partners to address the evolving needs of the business community, particularly in supporting SMEs and fostering long-term competitiveness.
Source: SBF
