Singapore firms call for cost relief, manpower support in Budget 2026: SBF survey

[SINGAPORE] As business sentiment weakens amid persistent global uncertainties, Singapore companies are looking to Budget 2026 for stronger government support.

Among their top asks for the upcoming Budget are schemes to manage rising costs, the development of the local workforce and improvement of cash flow, indicated the Singapore Business Federation’s (SBF) National Business Survey 2025, Annual Business Sentiments Edition, released on Thursday (Nov 27).

Their request comes as business confidence has taken a hit, with the business sentiment index (BSI) falling to 52.2 in the third quarter of this year, from 55.4 in Q2.

It reflects “a sense of persistent cautiousness among businesses amid ongoing global economic and tariff uncertainties”, as “a larger share of businesses anticipate worsening conditions (37 per cent) rather than improvement (14 per cent) in the year ahead”, the survey said.

A total of 553 businesses were surveyed from Sep 29 to Oct 17. Among the industries surveyed were wholesale trade, financial and insurance activities, as well as manufacturing.

The majority of the businesses surveyed, or 82 per cent, were small and medium-sized enterprises (SMEs), while the remaining 18 per cent were large companies. This proportion largely reflects SBF’s membership base.

Top requests for Budget 2026

As the government prepares for Budget 2026, the annual survey identifies the top priorities of local enterprises.

• Managing rising costs: 63 per cent of businesses identified schemes to manage rising costs as their top request.
• Workforce development: Support for the attraction and development of the local workforce is the second most-requested area, cited by 46 per cent of respondents.
• Cash flow: 42 per cent of companies are seeking measures to help improve cash flow.

Companies indicated a desire for stronger support in capability development, specifically regarding strategy development (34 per cent), ensuring financial robustness (28 per cent), and strengthening human capital (31 per cent).

SBF chief executive officer Kok Ping Soon noted that manpower costs, uncertainty in external demand, and rental costs are weighing down businesses.

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The survey results reveal that manpower cost (63 per cent), customer demand uncertainty (44 per cent), and rental expenses (40 per cent) remain the top three business challenges in 2025, findings consistent with that of the previous year.

Cybersecurity and data-privacy risks have also grown in prominence, rising to 36 per cent and displacing foreign workforce policies from the top five concerns.

“Businesses are calling out for support in managing costs, cash flow and workforce development in Budget 2026,” Kok said. “It reflects their desire to maintain resilience while investing in capability-building.”

Profitability squeeze

The call for Budget support comes as companies grapple with a deteriorating profitability outlook.

Overall profitability expectations dropped to 48.5, marking a 2.9-point decline from the previous quarter.

Only 4 per cent of businesses reported an increase in profitability over the past year, compared with 34 per cent that experienced a decline.

Rising manpower, rental and logistics costs continue to be the top three contributors to this squeeze.

The industries with the highest profitability expectations are banking, insurance, and other financial and insurance activities.

Meanwhile, the industries with the lowest profitability expectations are the retail trade, hotels, restaurants and accommodations sectors.

SMEs hit harder

SMEs expressed deeper pessimism than their larger counterparts, with 22 per cent dissatisfied with the current climate, compared with just 15 per cent of large firms.

Nearly four in 10 SMEs (38 per cent) anticipate conditions will worsen over the next year.

Shifting priorities and outlook

Concerns regarding US tariffs have moderated significantly, dropping from 81 per cent in April to 57 per cent in October. Sentiment towards Singapore’s economic outlook nonetheless remains cautious.

To navigate headwinds, companies are shifting their strategic focus. In 2026, businesses are prioritising increasing employee salaries (39 per cent), investment in new technologies (33 per cent), and overseas expansion (30 per cent).

The drive for revenue growth (65 per cent) and ensuring positive cash flow (49 per cent) remain the top priorities for businesses, consistent with their focus in 2024.

Notably, finding new business opportunities and maintaining revenue levels have overtaken talent-related priorities such as staff retention, attraction and training – signalling the heightened importance placed on commercial resilience and market expansion in a more demanding environment.