The Singapore Business Federation (SBF) today released findings from a new business poll, highlighting that two in three Singapore businesses have been moderately to severely affected by the ongoing Middle East conflict, as rising energy and logistics costs affect operations and demand. While firms are actively managing costs and pivoting strategies, the findings point to a widening gap in how businesses are coping, with SMEs facing sharper disruptions and expressing significantly lower confidence as compared to larger firms.

Widespread Impact with SMEs Facing Greater Strain

The impact of the conflict is being felt across multiple cost and demand channels, with the most affected areas being energy prices (66%), shipping and freight costs (54%), and customer demand (48%). While half of large companies reported a moderate impact, SMEs are experiencing more acute challenges, with one in three reporting significant to severe disruptions. Large firms also reported higher exposure to insurance and security-related costs (42%), compared to SMEs (17%), highlighting differences in risk exposure across firm sizes.

SMEs Less Confident in Managing Ongoing Volatility

This disparity in impact has created a stark confidence gap. While 78% of large firms expressed confidence in managing ongoing volatility, only 36% of SMEs felt the same. Furthermore, 54% of all businesses remain very or extremely concerned about their long-term viability if current conditions persist beyond the next six months. 

Despite these headwinds, Singapore businesses are taking active steps to adapt. One in two firms has already raised prices or renegotiated contracts. SMEs are prioritising cash conservation (40%) while large firms with more resources and capabilities are undertaking sophisticated risk management, including fuel and FX hedging (33%) and accelerating investments in energy efficiency (17%).

Higher CIT Rebate Welcomed but Additional Measures Requested

Businesses are making a strong call for more targeted assistance to cope with sustained cost pressures and uncertainty. Top asks include working capital support (41%) and logistics cost management (35%).  Among the measures to help businesses announced in Parliament on 7th April, the Corporate Income Tax (CIT) Rebate was cited as delivering the strongest immediate value (60%).  This was followed by the Energy Efficiency Grant (43%) and support to defray cost increases in government projects (31%). 

A summary of the poll findings is in Annex A while the full report is in Annex B. 

Mr Kok Ping Soon, CEO of SBF, said, “Our latest poll shows a growing confidence gap between SMEs and larger firms. While bigger companies are better able to manage rising costs, SMEs are feeling the strain more acutely amid ongoing energy and logistics volatility. Businesses are tightening costs and managing risks through supply chain diversification and currency hedging. Businesses welcomed the higher CIT rebate but are also calling for working capital support and help with logistics cost. SBF will continue working with the Government to keep support measures targeted and effective.”

SBF’s poll findings were also shared at the “Tariffs and Energy Uncertainty: What Now, What’s Next?” dialogue on 21 April with more than 150 business leaders. Graced by Dr Tan See Leng, Minister for Manpower and Minister-in-charge of Energy and Science & Technology in the Ministry of Trade and Industry, the dialogue examined the impact of the U.S. tariff measures and the ongoing Middle East conflict on businesses. Participants exchanged views on how companies can respond to heightened uncertainty, with a focus on strengthening supply chain resilience, diversifying markets, and adopting practical strategies to manage tariff exposure and operational risks.

Annex A: Summary of Key Findings

Annex B: SBF – IndSights Business Dipstick Report