SINGAPORE: Two in three businesses here have been moderately to severely affected by the war in the Middle East, which has driven up energy and logistics costs, a Singapore Business Federation (SBF) survey has found.
The survey released on Wednesday (April 22) collected the views of 254 companies, the majority of which were small and medium-sized enterprises (SMEs).
SMEs reported facing sharper disruptions and were less confident about coping with the crisis than larger businesses.
For instance, SMEs were found to be more affected by rising labour costs, exerting pressures on their cash flow.
More than half of SMEs also experienced a decline in revenue from Singapore customers. Meanwhile, only a third of large businesses saw a decrease.
In fact, 21 per cent of large businesses posted a growth in revenue from the segment, suggesting that they were better positioned to adapt to shifting market conditions.
Only 36 per cent of SMEs expressed confidence about managing the ongoing volatility, compared with 78 per cent of larger companies.
SBF chief executive Kok Ping Soon 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 said they were feeling the impact of the conflict, particularly from energy prices, shipping and freight costs, and customer demand.
More than half of businesses were very concerned about their long-term viability, if the current conditions persisted beyond the next six months.
The survey also found that businesses were taking steps to adapt. One in two companies said they had raised prices or renegotiated contracts since the war.
SMEs were prioritising cash conservation, while larger businesses were turning to sophisticated risk management strategies.
These include fuel price and currency hedging to guard themselves against losses caused by fluctuations in foreign exchange rates, and accelerating investments to become more energy-efficient.
Large companies were also found to be more highly exposed to insurance and security-related costs, compared with SMEs.
Kok said businesses welcomed a higher corporate income tax rebate. The 40 per cent corporate income tax rebate announced in Budget 2026 has been increased to 50 per cent.
The companies also saw value in the Energy Efficiency Grant, which provides funding for investments in energy-efficient equipment.
Kok added that businesses were looking for more working capital support and help with logistics costs.
“SBF will continue working with the Government to keep support measures targeted and effective,” he said.
SBF is a business chamber with more than 34,000 members across diverse industries.
Another recent survey conducted by the Singapore National Employers Federation found that most bosses here were facing mounting cost pressures due to an energy price shock triggered by the Iran war.
Some businesses have frozen hiring, while others have turned to cutting bonuses, allowances and benefits, the survey found. - The Straits Times/ANN
