The Singapore Business Federation (SBF) has released findings from its National Business Survey 2025 – Annual Business Sentiments Edition, which revealed that overall business confidence – measured by the Business Sentiment Index (BSI) – declined from 55.4 in Q2 2025 to 52.2 in Q3 2025.
This represents a sharper 3.2-point fall compared to the 1.1-point dip between Q1 and Q2, reflecting a sense of persistent cautiousness among businesses amid ongoing global economic and tariff uncertainties.
Sentiment toward Singapore’s economic outlook over the next 12 months also remains cautious, with 37% of companies expecting the economy to worsen compared to only 14% anticipating improvement, underscoring the need for continued vigilance and adaptability among businesses.
Differing sentiments across business size and sectors
Companies in Banking & Insurance, Other Financial & Insurance Activities (e.g. Holding/Investment Companies), and Construction & Civil Engineering sectors remain comparatively more confident, while those in the Hotels, Restaurants & Accommodations (HRA), Retail Trade, and IT & Related Services sectors are more bearish.
Across the seven measured dimensions, profitability expectations are lowest at 48.5, reflecting a 2.9-point decline from Q2.
Small and medium-sized enterprises (SMEs) are notably more pessimistic than large companies with 22% expressing dissatisfaction with the current climate compared to 15% of large firms. Nearly four in ten (38%) of SMEs also anticipate a deterioration over the next year versus 34% of large companies.
Across sectors, expectations are uneven: businesses in Retail Trade and HRA sectors expect conditions to worsen over the next 12 months, while comparatively more firms in Administrative & Support Services, Banking & Finance, and Wholesale Trade foresee improvements.
Easing concerns over US Tariffs, but global sentiment still weak
Sentiments relating to the impact of US tariffs have eased since the initial reaction following Liberation Day in April this year. Negative assessments have fallen from 81% to 57% in October 2025, while the proportion of businesses perceiving no significant impact has correspondingly risen from 15% to 41%.
Despite this moderation in tariff-related concerns, businesses remain dissatisfied with the global business climate. Dissatisfaction stands at 33%, outweighing the 14% who are satisfied. However, companies are comparatively more upbeat about the ASEAN business climate, with 22% expressing satisfaction, indicating that regional markets continue to offer more promising opportunities and resilience.
Mr Kok Ping Soon, Chief Executive Officer of SBF, said. “Amidst external uncertainties and operating under persistent cost pressures, Singapore businesses are cautious on the outlook for 2026.
“Nonetheless, it is encouraging that concerns around the impact of US tariffs have softened, suggesting that companies have begun adjusting to the new trade dynamics or are experiencing less disruption than initially expected. However, manpower costs, uncertainty in external demand, and rental costs are weighing down businesses.
“Businesses are calling out for support in managing costs, cash flow, and workforce development in Budget 2026. It reflects their desire to maintain resilience while investing in capability building.
“SBF will continue to support companies in strengthening their competitiveness and work closely with the Government to ensure that Singapore remains an attractive and vibrant hub for enterprise and growth.”
