The Singapore Business Federation (SBF) has revealed that two-thirds of Singaporean businesses are grappling with moderate to severe impacts from the ongoing Middle East conflict. The conflict has led to increased energy and logistics costs, affecting operations and demand. Small and medium-sized enterprises (SMEs) are particularly vulnerable, with one in three reporting significant disruptions, whilst half of larger firms experience moderate impacts.
The disparity in impact has resulted in a confidence gap, with only 36% of SMEs confident in managing ongoing volatility, compared to 78% of larger firms. Overall, 54% of businesses are concerned about their viability if current conditions persist beyond six months. Despite these challenges, businesses are adapting by raising prices and renegotiating contracts. SMEs focus on cash conservation, whilst larger firms employ sophisticated risk management strategies, such as fuel and foreign exchange hedging.
Businesses are calling for targeted assistance to cope with sustained cost pressures. The Corporate Income Tax (CIT) Rebate is seen as the most valuable immediate measure, followed by the Energy Efficiency Grant and support for government project cost increases. SBF CEO Kok Ping Soon highlighted the growing confidence gap, stating, “Whilst bigger companies are better able to manage rising costs, SMEs are feeling the strain more acutely.”
The findings were shared at a recent dialogue attended by over 150 business leaders, where discussions centred on strengthening supply chain resilience and managing tariff exposure amidst heightened uncertainty.
