A recent survey by the Singapore Business Federation (SBF) shows that two in five businesses expect the economy to weaken over the next 12 months, reflecting cautious sentiment amid global uncertainty, elevated costs and persistent geopolitical tensions.

While some companies remain optimistic, a significant portion anticipate a tougher operating environment driven by structural challenges.

Why Businesses Are Turning Cautious

According to the SBF findings, key concerns include:

• High operating and manpower costs pressuring margins
• Sluggish global demand affecting trade-driven sectors
• Geopolitical risks disrupting supply chains and investments
• Financing challenges due to elevated interest rates

These factors contribute to a more defensive stance among local companies, particularly SMEs.

Bright Spots Remain Despite Headwinds

Not all sectors share the same pessimism. Positive expectations are emerging from:

• Healthcare due to long-term demographic demand
• Hospitality and tourism driven by sustained travel recovery
• Digital services and tech benefitting from enterprise transformation
• Construction and infrastructure supported by public-sector projects

These industries continue to show resilience and attract new investment.

Business Priorities for the Coming Year

Companies are focusing on several strategic adjustments to navigate uncertainty:

• Cost control through process optimisation and automation
• Upskilling to reduce reliance on labour and improve productivity
• Exploring regional markets for diversification
• Digitalisation to drive efficiency and customer engagement

Many firms are also reviewing expansion timelines and adjusting capital expenditure plans.

Impact on the Property Market

The cautious business outlook could influence several real estate segments:

• Office demand may stay stable but selective, with tenants prioritising efficiency
• Industrial and logistics space remains supported by e-commerce and regional trade
• Retail performance depends on consumer confidence and tourism strength
• Investment activity may slow but yield-driven assets remain attractive

Overall, Singapore’s diversified economy provides buffers even as businesses adopt a more measured stance.

TopBroker Insight

The SBF survey highlights a familiar theme: near-term caution but long-term confidence. While businesses brace for volatility, structural demand in key sectors and Singapore’s strong fundamentals continue to anchor stability. For investors and business owners, this is a time to stay strategic, resilient and opportunity-focused.