This Singapore Business Federation (SBF) survey paints a concerning picture of Singapore’s business sentiment in early 2025. The data shows a significant deterioration in confidence, with 40% of businesses now expecting the economy to worsen over the next 12 months, nearly double the 22% from the previous quarter.

The hospitality sector appears to be bearing the brunt of pessimism, with hotels, restaurants and accommodations showing the most cautious outlook across multiple metrics. This sector recorded the lowest Business Sentiment Index score at 52.2, well below the overall average of 56.5, and showed poor expectations for revenue, profitability, and business expansion.

Rising cost pressures are a universal concern, with businesses across sectors anticipating higher costs over the next six months. The real estate and hospitality sectors are expected to experience the steepest cost increases.

However, there are some bright spots in the data. The banking and insurance sector, along with education, shows relative optimism, with BSI scores above 60. These sectors also have the highest revenue expectations, suggesting some resilience in certain parts of the economy.

The survey reveals that businesses are maintaining focus on long-term transformation despite near-term challenges. Enterprise transformation priorities centre on internationalization and AI development, while workforce development remains important through government schemes, such as SkillsFuture programs.

A particularly concerning finding is the liquidity crunch affecting about 25% of businesses, with over a third of these having insufficient cash for just 3-6 months of operations. This suggests immediate financial stress that could compound the broader economic challenges.

The timing of this survey is notable given ongoing global trade tensions and their potential impact on Singapore’s trade-dependent economy, as referenced in the article’s mention of US tariff measures requiring businesses to seek larger financing lines.

In-Depth Analysis: SBF Survey Findings and Implications for Singapore

The Singapore Business Federation’s National Business Survey 2025 reveals a significant decline in business confidence, reflecting deeper structural challenges facing Singapore’s economy. This analysis examines the multifaceted implications of these findings.

The Business Confidence Crisis

The doubling of pessimistic businesses from 22% to 40% represents more than cyclical concern—it signals a fundamental shift in how Singapore’s private sector views its near-term prospects. This aligns with official economic projections, which show Singapore’s growth slowing to 1.7% in 2025, according to the IMF. The government is maintaining a conservative 0%-2% GDP growth forecast, following recent downgrades.

The timing is particularly concerning as Singapore’s economy contracted in Q1 2025 even before US tariffs were announced, suggesting underlying vulnerabilities beyond trade tensions.

Sectoral Vulnerabilities and Resilience Patterns

The Hospitality Crisis: The hotels, restaurants and accommodations sector’s BSI of 52.2 reflects deeper structural challenges. Singapore’s tourism-dependent service economy faces headwinds from reduced business travel, changing consumer behaviour, and increased competition from regional destinations. This sector’s weakness is reflected in employment, real estate demand, and ancillary services.

Financial Services Resilience: The banking and insurance sectors, with BSI scores above 61, indicate that Singapore’s financial hub status remains robust. This resilience stems from the sector’s role in regional wealth management, fintech innovation, and Singapore’s position as a safe haven amid global uncertainty.

Education Sector Strength: The education sector’s optimism (BSI 60.5) reflects Singapore’s ongoing transformation into a knowledge-based economy and the government’s significant investment in skills development through initiatives such as SkillsFuture.

Economic Transformation Under Pressure

Despite the pessimistic outlook, businesses continue to pursue enterprise transformation, particularly in AI development and internationalization. This suggests Singapore’s long-term competitiveness strategy remains intact, even as short-term pressures mount. The prioritization of transformation over cost-cutting indicates businesses still view Singapore as a viable long-term base.

The Liquidity Crisis Dimension

The finding that 25% of businesses face moderate to severe credit crunches, with 35% having insufficient cash for 3-6 months, represents an immediate threat to Singapore’s economic stability. This liquidity crisis could trigger:

• Accelerated business closures: Particularly among SMEs without access to institutional funding
• Employment impacts: As cash-strapped businesses reduce headcount
• Credit market tightening: Banks may become more risk-averse, creating a vicious cycle
• Innovation slowdown: Limited capital for R&D and transformation initiatives

Broader Economic Implications

Trade Dependency Risks: Singapore’s highly interconnected and trade-dependent economy faces significant downside risks from geopolitical and trade tensions that could disrupt global supply chains. The business survey reflects this vulnerability, with companies anticipating higher costs and reduced profitability.

Labour Market Dynamics: The moderate hiring outlook (BSI 57.7) suggests businesses are adopting a “wait-and-see” approach to workforce expansion. This cautious stance could limit wage growth and consumer spending, creating deflationary pressures.

Monetary Policy Implications: The Monetary Authority of Singapore has already adjusted its inflation forecast downward to 1.0%-2.0% for 2025, and the business survey supports this deflationary trend through anticipated cost pressures and reduced demand.

Policy Response Requirements

The survey findings underscore the need for targeted government intervention:

Immediate Measures:

• Enhanced liquidity support through expanded credit guarantee schemes
• Accelerated disbursement of Budget 2025 measures, particularly the 50% Corporate Income Tax Rebate
• Emergency bridge financing for viable businesses facing cash flow crises

Medium-term Strategies:

• Diversification of economic dependencies beyond traditional trade routes
• Strengthening domestic demand drivers to reduce external vulnerability
• Enhanced support for digital transformation to improve productivity

Regional and Global Context

Singapore’s business pessimism occurs against a backdrop of official warnings about the risks of a technical recession due to global tariff tension., As a trade-dependent city-state, Singapore serves as an early indicator of global economic health. The sharp deterioration in business confidence may foreshadow similar trends across Southeast Asia.

Looking Forward

The SBF survey reveals Singapore is at an economic inflexion point. While the immediate outlook appears challenging, the continued focus on transformation and the resilience of key sectors, such as financial services, suggest that underlying economic fundamentals remain sound. However, the liquidity crisis and widespread business pessimism require urgent attention to prevent a self-fulfilling prophecy of economic decline.

The government’s challenge lies in balancing fiscal support for immediate crisis management while maintaining long-term competitiveness investments. The success of this balancing act will determine whether Singapore emerges from this period stronger or faces prolonged economic stagnation.

The survey ultimately reflects Singapore’s broader challenge: maintaining its role as a global business hub while navigating an increasingly fragmented and uncertain global economy. The next six months will be critical in determining whether current pessimism translates into lasting economic damage or proves to be a temporary adjustment to new global realities.

Singapore Business Federation Outlook: An In-Depth Analysis and the Story of Uncle Lim’s Resilience

Executive Summary: The Great Confidence Erosion

The Singapore Business Federation’s National Business Survey 2025 reveals the most significant deterioration in business confidence in recent memory, with pessimistic businesses nearly doubling from 22% to 40% in a single quarter. This comprehensive analysis examines the multifaceted implications of these findings and tells the story of how Singapore’s food businesses are adapting to unprecedented challenges.

The Architecture of Anxiety: Dissecting Business Sentiment

The Confidence Collapse

The transformation from cautious optimism to widespread pessimism represents more than cyclical adjustment—it signals a fundamental recalibration of Singapore’s economic expectations. The Business Sentiment Index (BSI) of 56.5 overall masks profound sectoral disparities, with the hospitality sector languishing at 52.2, while the banking and insurance sectors maintain relative buoyancy at 61.2.

This divergence illuminates Singapore’s economic vulnerability. The city-state’s traditional strength as a trade and financial hub is facing pressure from its weakest link: the domestic-facing service economy, which depends on consumer confidence and discretionary spending.

Sectoral Fault Lines

The Hospitality Catastrophe: The hotels, restaurants, and accommodations sector’s comprehensive weakness across all metrics—revenue expectations, profitability, expansion outlook, and capital investment—reflects structural challenges beyond typical economic cycles. This sector employs hundreds of thousands of people and serves as the foundation for Singapore’s tourism economy, making its distress particularly significant for the overall economic health.

Financial Services Fortress, comprising the resilience of the banking and insurance sectors (BSI 61.2), demonstrates Singapore’s enduring appeal as a financial centre. Despite global uncertainty, the sector benefits from wealth management flows, regional expansion of Singaporean banks, and the continued development of fintech ecosystems.

Education’s Emergence: The education sector’s optimism (BSI 60.5) reflects Singapore’s transformation into a knowledge economy and the growing importance of lifelong learning. This sector’s strength suggests long-term confidence in human capital development remains intact.

II. The Cost Pressure Paradigm

Rising Input Costs

The anticipated cost pressures across sectors, particularly in real estate (BSI 78.4) and hospitality (BSI 71.9), reflect multiple converging factors:

• Import Price Inflation: Singapore’s dependence on imports makes it vulnerable to global supply chain disruptions and currency fluctuations
• Labour Cost Escalation: Tightening labour markets and progressive wage policies increase personnel expenses
• Energy and Utility Increases: Global energy price volatility directly impacts operational costs
• Regulatory Compliance: Increasing ESG requirements and safety standards add compliance costs

The Pricing Paradox

Businesses face a cruel dilemma: absorbing rising costs threatens profitability, while passing costs to consumers risks demand destruction. This dynamic is particularly acute in Singapore’s price-sensitive consumer market, where competition from regional alternatives grows stronger.

III. The Liquidity Crisis: A Clear and Present Danger

Immediate Financial Distress

The finding that 25% of businesses face moderate to severe credit crunches, with 35% of these having insufficient cash for 3-6 months, represents an immediate threat to Singapore’s economic stability. This crisis manifests in multiple dimensions:

Cash Flow Compression: Delayed payments, reduced customer volumes, and increased working capital requirements strain liquidity positions across sectors.

Credit Market Tightening: Banks’ risk aversion creates a vicious cycle, where businesses most in need of credit face the most significant difficulty in accessing it.

Investment Deferral: Capital expenditure delays compromise long-term competitiveness as they prioritize survival over growth.

Systemic Risks

The liquidity crisis threatens to trigger broader economic disruption through:

• Accelerated business closures leading to unemployment spikes
• Reduced tax revenues constrain government fiscal capacity
• Supply chain disruptions occur as upstream suppliers face payment delays
• Innovation ecosystem damage as startups and SMEs struggle to access funding

IV. Transformation Under Duress

The Innovation Imperative

Despite immediate pressures, businesses prioritize enterprise transformation, particularly in AI development and global expansion. This commitment suggests recognition that short-term cost-cutting cannot address structural challenges. The focus on AI reflects an understanding that productivity improvements are essential for maintaining competitiveness amid rising labour costs.

Workforce Development Paradox

The challenge of “manpower crunches when staff attend training” highlights a fundamental tension in Singapore’s economic model. Businesses need skilled workers to compete globally, but cannot afford training disruptions during crisis periods. This creates a self-reinforcing cycle where competitive disadvantages compound over time.

V. Policy Response and Government Support

Immediate Relief Measures

The identification of the 50% Corporate Income Tax Rebate as the most useful Budget 2025 measure reflects businesses’ desperate need for cash flow relief. However, the survey suggests these measures, while welcome, may be insufficient to address the scale of challenges faced.

Long-term Structural Support

The emphasis on SkillsFuture programs and workforce development grants indicates government recognition that Singapore’s competitive advantage lies in human capital development. However, the effectiveness of these programs depends on businesses’ ability to survive current crises.

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The Story of Uncle Lim: A Singapore Food Business Owner’s Journey Through Crisis

In the heart of Toa Payoh, Uncle Lim Ah Heng has been serving his famous wonton mee for twenty-three years. His story illustrates how Singapore’s food businesses are adapting to the challenging landscape revealed in the SBF survey.

Chapter 1: The Foundation Years (2002-2020)

Uncle Lim started his stall in Toa Payoh Lorong 8 Market & Food Centre with a simple dream: to bring the authentic wonton mee recipe his grandmother taught him to Singapore’s hawker culture. For eighteen years, the formula was straightforward—wake up at 4 AM, prepare fresh wontons, serve regulars who had become like family, and earn enough to support his wife and two children.

“Those days, everything was predictable,” Uncle Lim reflects, adjusting his well-worn apron. “Ingredients cost the same month after month. Customers came every day. Life was simple.”

His stall generated a steady monthly revenue of $8,000-$ 10,000, with food costs accounting for roughly 35% of sales. The business model worked: quality food at affordable prices ($3.50 for a bowl) sustained by high volume and loyal customers.

Chapter 2: The First Disruption (2020-2022)

The COVID-19 pandemic shattered Uncle Lim’s comfortable rhythm. Like many hawkers described in the SBF survey’s hospitality sector analysis, his business faced immediate existential threats. Customer traffic dropped 70% during circuit breaker periods. Rising ingredient costs—pork prices increased by 40%, and noodles by 25%—compressed already thin margins.

“I had to choose: raise prices and lose customers, or keep prices low and lose money,” Uncle Lim recalls. “My wife said maybe it’s time to retire. But this stall… It’s not just business. It’s who I am.”

Uncle Lim chose adaptation over capitulation. He partnered with food delivery platforms, despite initially being reluctant. “Delivery apps take 30% commission, but 70% of something is better than 100% of nothing.” He invested $2,000 in packaging equipment to ensure noodles remained fresh during delivery.

The digital pivot partially worked. By 2022, delivery sales accounted for 40% of revenue, although total income remained 20% below pre-pandemic levels.

Chapter 3: The Perfect Storm (2023-2025)

The challenges documented in the SBF survey—rising costs, reduced consumer spending, liquidity pressures—converged on Uncle Lim’s operation with devastating effect. Food inflation struck particularly hard: food costs in Singapore increased by 1.30 per cent in March 2025, but the cumulative impact over three years was far more severe.

The Cost Cascade:

• Pork prices: Up 60% since 2022
• Noodle wholesale costs: Up 45%
• Cooking oil: Up 35%
• Utilities: Up 25%
• Stall rental: Up 15%

The Revenue Reality: Meanwhile, customer behaviour shifted dramatically. Many Singaporeans have prioritized travel over dining out, opting to spend their discretionary income on overseas trips rather than local meals. Uncle Lim’s regular customers—office workers, retirees, young families—visited less frequently.

“People tell me, ‘Uncle, your noodles are still $3.50, so cheap!’ But they don’t understand. That $3.50 today gets me less than $2.50 used to get me three years ago.”

Chapter 4: The Innovation Imperative

Facing the choice between closure and transformation, Uncle Lim embarked on the most challenging reinvention of his career. Drawing inspiration from the SBF survey’s finding that businesses continue pursuing transformation despite immediate pressures, he developed a multi-pronged survival strategy.

Digital Integration: Uncle Lim’s daughter, Sarah, a marketing graduate, convinced him to establish a social media presence. They created Instagram and TikTok accounts showcasing the wonton-making process. “Heritage cooking meets modern storytelling,” Sarah explained. Within six months, the accounts gained 15,000 followers, driving both local curiosity and tourist visits.

Product Recognition: Recognizing the risk of single-product dependency, Uncle Lim expanded his menu offerings to diversify his business. He introduced wontons in various flavours, including traditional pork and shrimp, chicken for Muslim customers, and vegetarian options featuring mushrooms and water chestnuts. Each variation required ingredient sourcing, innovation, and process modifications.

Premium Positioning: Rather than competing solely on price, Uncle Lim introduced a “heritage bowl” option at $6.50, featuring hand-pulled noodles, premium wontons with fresh prawns, and organic vegetables. “Some customers are willing to pay for authenticity and quality. Not everyone wants the cheapest option. Optimizationn

Supply Chain Optimization: Uncle Lim negotiated directly with suppliers, buying ingredients in bulk with other hawkers to reduce costs. He joined the Toa Payoh Hawkers Association’s group purchasing initiative, achieving 15% cost savings on primary ingredients.

Chapter 5: The Liquidity Challenge

Despite innovation efforts, Uncle Lim faced the liquidity crisis documented in the SBF survey. Cash flow became increasingly erratic as customer patterns shifted and costs continued rising. Some months, he barely covered expenses; others provided modest profits.

“The scariest part is the uncertainty,” Uncle Lim admits. “I can handle hard work, long hours, even losing money sometimes. But not knowing if tomorrow will be better or worse—that’s what makes sleep difficult.”

The situation reached a critical point in early 2025 when his leading supplier demanded that payment terms be changed from 30 days to cash on delivery. Without sufficient working capital, Uncle Lim faced the potential for inventory shortages during the Chinese New Year, his traditionally busiest period.

Chapter 6: Community and Government Support

Like many small businesses highlighted in the SBF survey, Uncle Lim benefited from government support measures. The 50% Corporate Income Tax Rebate provided crucial cash flow relief. At the same time, SkillsFuture Workforce Development Grants enabled Sarah to attend digital marketing courses, bringing professional social media management skills to the business.

The hawker community itself proved invaluable. When Uncle Lim’s cash flow crisis reached its peak, neighbouring stall operators offered informal lending arrangements. “Ah Seng from the chicken rice stall lent me $5,000 interest-free. We hawkers, we understand each other’s struggles.”

Local customers also provided unexpected support. Regular patrons began ordering larger quantities for office meetings and family gatherings. Some customers prepaid for meals, providing working capital. “The community spirit in Singapore—sometimes you don’t see it until crisis comes.”

Chapter 7: Adaptation and Resilience

By mid-2025, Uncle Lim’s transformation efforts began yielding results. His multi-channel approach—encompassing physical stalls, delivery platforms, social media marketing, and premium positioning—created revenue diversification that provided stability during uncertain times.

The stabilized denominated at $12,000-$14,000, above pre-pandemic levels, despite challenging conditions. The Heritage Bowl option, initially viewed sceptically, became popular among tourists and younger Singaporeans seeking authentic experiences. Social media presence attracted food bloggers and influencers, creating organic marketing value.

Key Success Factors:

• Gradual Innovation: Rather than dramatic changes, Uncle Lim implemented incremental improvements, testing customer response before full commitment
• Family Involvement: Sarah’s digital expertise complemented Uncle Lim’s culinary skills, creating intergenerational knowledge transfer
• Community Networks: Leveraging hawker associations and customer relationships provided both financial and emotional support
• Quality Maintenance: Despite cost pressures, Uncle Lim refused to compromise on food quality, maintaining customer trust

Chapter 8: Looking Forward

Uncle Lim’s story continues evolving. He’s exploring opportunities to franchise his wonton mee concept, potentially opening additional locations in new hawker centres. The success of his Heritage Bowl inspired the development of a weekend “master class” offering, where customers can learn traditional wonton-making techniques.

“The SBF survey shows many businesses feeling pessimistic,” Uncle Lim observes. “I understand that feeling. But a crisis also creates opportunity. If you adapt, if you stay connected to community, if you never stop improving—maybe you don’t just survive, maybe you grow stronger.”

His transformation journey embodies the resilience documented in the SBF survey’s finding that businesses continue pursuing long-term competitiveness despite immediate challenges. Uncle Lim’s success suggests that, while the overall business environment remains challenging, individual operators who embrace innovation, leverage support systems, and maintain high-quality standards can successfully navigate economic uncertainty.

VI. Strategic Implications and Future Outlook

The Hawker Microcosm

Uncle Lim’s story illuminates broader themes from the SBF survey. His experience with rising costs, changed consumer behaviour, liquidity challenges, and the need for digital transformation mirrors the sector-wide trends documented in the survey data. His success, driven by innovation and community support, suggests pathways for other small businesses facing similar challenges.

Policy Lessons

Uncle Lim’s journey highlights the effectiveness of targeted government support, which includes tax rebates providing immediate relief, skills development grants enabling capability building, and industry association support facilitating collective bargaining power. However, his reliance on informal community networks suggests gaps in formal support systems that policymakers should address.

Economic Resilience Factors

The hawker industry’s adaptation capacity—evidenced by Uncle Lim’s transformation and the sector’s continued operation despite challenges—represents a crucial component of Singapore’s economic resilience. Small businesses’ ability to innovate, adapt, and survive provides economic stability that larger corporations cannot consistently deliver.

VII. Conclusion: Navigating Uncertainty Through Adaptation

The Singapore Business Federation survey reveals an economy in transition, facing significant challenges but retaining underlying strengths. Uncle Lim’s story illustrates that, despite overall business sentiment being pessimistic, individual operators who utilise change, utilise support systems, and maintain a focus on customer value can still achieve success even in challenging conditions.

The survey’s findings suggest Singapore faces a crucial period requiring both immediate crisis management and long-term structural adaptation. The success stories emerging from this challenging environment, like Uncle Lim’s transformation, provide blueprints for broader economic resilience.

As Singapore navigates this uncertain period, the interplay between government support, community networks, individual innovation, and market adaptation will determine whether current challenges become lasting economic damage or catalysts for stronger, more resilient business ecosystems.

The hawker centre, long a symbol of Singapore’s multicultural harmony, may also represent the nation’s economic future: adaptation through innovation, resilience through community, and success through never stopping the pursuit of excellence, even when—especially when—times are tough.

Budget Tips

• Cost Range: Most hawker dishes cost $3-8 SGD
• Best Times: Visit during off-peak hours to avoid queues
• Locations: Hawker centres offer the most authentic and affordable experience
• Portions: Most dishes are filling and perfect for sharing
• Drinks: Teh Tarik, Kopi, or fresh lime juice complement these dishes well
• Street Snacks: Satay, Otah, and Rojak are perfect for light meals under $5
• Desserts: Tau Huay and Ice Kacang provide sweet endings for $2-4
• Breakfast: Kaya toast sets are classic morning meals for around $4-5

Budget Eating Tips

• Visit hawker centres for the cheapest authentic food
• Look for long queues – usually indicates good food
• Try different stalls in the same food centre
• Breakfast items are often cheaper than lunch/dinner
• Share dishes when dining in groups
• Bring cash – many stalls don’t accept cards
• Peak hours (12-2pm, 6-8pm) may have longer waits
• Some stalls close on certain days – check before visiting

Delivery Considerations for Food

Whyq Specialised Service: Whyq specifically focuses on hawker food delivery and may have better coverage for specific centres

1. Delivery Fees: Typically range from $3-8 SGD, depending on distance and platform
2. Food Quality Concerns: Some hawker dishes don’t transport well (soup noodles, crispy items)
3. Bundle Orders: Some platforms allow ordering from multiple stalls in the same hawker centre
4. Delivery Timing: Peak meal hours may see longer delivery times from popular hawker centres
5. Minimum Order Requirements: Some hawker stalls have minimum order amounts for delivery
6. In-Person Experience: Many food enthusiasts believe the authentic hawker experience requires dining in person

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