COMPARED with the year before, more businesses are looking for inflation-related support to cope with rising costs, and also funding for them to launch digital adoption and sustainability projects, a UOB study has found.
The UOB Business Outlook Study 2025 (SMEs & Large Enterprises) notes that half the respondents, up from 45 per cent in the year before, said that they wanted support in coping with inflation.
The second-most desired form of support are grants and funding to adopt digital solutions, with 46 per cent of firms citing this, up from 39 per cent in the 2024 survey. This is followed by incentives to adopt sustainable practices, which came in at 41 per cent of respondents, versus 29 per cent a year earlier. The share of companies that wanted support in the form of higher SkillsFuture credits was on a par with the previous year (42 per cent). A quarter of the respondents wanted more incentives to support export opportunities, versus 20 per cent previously.
UOB’s findings were based on a survey of 900 small and medium-sized enterprises (SMEs) and large enterprises in Singapore across key sectors in January 2025.
On business sentiment, the study found that 82 per cent of firms were more bullish about the business environment, compared with 78 and 75 per cent in 2022 and 2023, respectively. Still, high inflation (31 per cent) was cited by firms as the top macro factor affecting their business, with those in the professional-services sector and business-services sectors being the hardest hit. Next came rising operational costs, such as those for raw materials and rent (30 per cent), then manpower costs (29 per cent). Industries most affected by an increase in operating expenses are the business services and construction and infrastructure sectors.
More firms cited the difficulty in retaining customers, which came in at 23 per cent of respondents, compared with 19 per cent in the prior year.
On sustainability, firms cited an increase in costs of products and services to end-customers (33 per cent) as the top barrier to implementing sustainability practices. This was followed by concerns over the negative impact on profits (29 per cent), and insufficient knowledge to identify and execute the right initiatives for the company (27 per cent).
The study also tracked the awareness level and adoption rate of initiatives rolled out in past Budgets. It found that 83 per cent of companies have applied for – or plan to apply for – initiatives announced in Budget 2024, up from 78 per cent in the previous year. However, a significant gap between awareness level and the eventual application of Budget support schemes still exists, UOB noted.
Only 14 per cent of firms have applied or plan to apply for the SkillsFuture Enterprise Credit, even though 29 per cent of the respondents indicated that they were aware of the scheme – making it the top initiative that companies were aware of.
The Progressive Wage Credit was the next initiative that firms are most aware of, which came in at 21 per cent of companies. However, only 8 per cent have applied or plan to apply for it. Of the firms that did not tap the initiatives from Budget 2024, the top reason for not doing so was uncertainty on which initiative would be relevant to their business (41 per cent). Others cited a lack of time (30 per cent), and their business not requiring the help (23 per cent).
