The OCBC SME Index has shown an improvement in the second quarter (Q2) of 2025, reaching 50.5, up from 49.9 in the previous quarter. This marks a shift into the expansion range, indicating that Singapore’s small and medium enterprises (SMEs) are holding up well against challenging economic conditions and a volatile geopolitical landscape. The index’s rise is supported by broad-based improvements across various industries, with overall collections growing by 5.8% year-on-year and payments increasing by 4.5%.
The GDP growth Nowcast based on the OCBC SME Index for Q2 2025 is approximately 4.5%, aligning closely with the Ministry of Trade and Industry’s advance estimates of 4.3%. This growth is driven by both domestic and externally oriented industries, although improvements remain narrow. Externally, sectors such as Wholesale Trade, Manufacturing, and Resources have shown expansion, whilst domestic industries like Food & Beverage (F&B), Business Services, and Building & Construction have also contributed to growth.
However, not all sectors are thriving. Transport & Logistics, Education, and Information and Communications Technology (ICT) continue to face contraction. The ongoing US tariff negotiations pose additional challenges, with 57% of 1,600 SME business owners surveyed expecting the outlook for the rest of the year to worsen or remain unchanged.
Linus Goh, OCBC’s Head of Global Commercial Banking, noted, “SMEs turned in a resilient performance in Q2 2025, holding up surprisingly well against challenging economic conditions with broad-based improvements across both external and domestic industries.” He added that US tariffs and potential disruptions to global trade remain significant concerns for SMEs, and the index is expected to ease in the second half of 2025.
As SMEs navigate these complexities, the OCBC SME Index will continue to provide valuable insights into their performance and the broader economic conditions they face.
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