The Singapore Business Federation’s (SBF) National Business Survey 2025 – Manpower and Wages Edition reveals a weakening business sentiment among Singaporean companies. The survey indicates that 35% of businesses expect conditions to worsen over the next 12 months, compared to only 14% anticipating improvement. The Business Sentiment Index (BSI) fell by 1.1 points from 56.5 in Q1 2025 to 55.4 in Q2 2025.
The survey highlights several key challenges. The impact of US tariff changes, whilst easing, still negatively affects 59% of businesses. Hiring plans have softened, with only 36% of companies intending to expand their full-time workforce in the coming year, a decrease from 40% in 2024. Larger companies remain more optimistic than small and medium enterprises (SMEs).
Wage growth is also expected to slow, with 59% of businesses planning salary increases, down from 64% in 2024. The proportion of companies intending to freeze wages has risen to 41%, primarily among SMEs. However, 66% of businesses plan to raise wages for lower-wage workers, aligning with the National Wages Council’s recommendations.
Talent development poses a significant challenge, with 47% of businesses citing upskilling and reskilling as concerns, nearly doubling from 25% in 2024. Rising manpower costs remain a top issue, although the proportion of businesses citing this has decreased from 75% to 65%.
The survey also notes that businesses welcome the removal of the maximum employment period for foreign workers, though increases in S pass qualifying salaries are a concern. Companies are adjusting their strategies, including expanding local recruitment and increasing wages to attract local talent.
As Singapore businesses navigate these challenges, the survey underscores the need for strategic adjustments in workforce management and policy adaptation to maintain competitiveness in a fluctuating economic landscape.
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