Over half of firms expect lower profits in 2026 as costs surge: SCCCI

Revenue growth expectations slip from 39% to 34.2%.

Singapore companies are bracing for tougher conditions ahead, with the vast majority anticipating higher running expenses and a growing share resigned to weaker returns compared to last year, according to the Singapore Chinese Chamber of Commerce & Industry (SCCCI) Annual Business Survey 2026.

Business leaders expecting revenue to increase this year fell from 39% in 2025 to 34.2% this year. Whilst 78% of respondents expect to be profitable in 2026, 56% of them expect lower profits than in 2025. 37.4% are confident their profits will be more than last year.

Top business concerns are rising business costs (71.8%), manpower availability (50.2%), and transforming their business and pivoting to growth areas (34.1%)

More than two in five (42.5%) said uncertainties of the outcome of transformation were their key challenge. Nearly the same number said it was lack of know-how on strategising and developing action plans to transform (42.1%). The third top challenge was lack of capital and funding.

“The survey results reveal that businesses are adopting a more cautious outlook amidst an increasingly complex environment: 38% of respondents indicated they are neither optimistic nor pessimistic, whilst 34% expressed their pessimism, with just 20% being optimistic,” Kho Choon Keng, president of SCCCI, said during his opening speech at the SMEICC 2026.

Meanwhile, nearly half of businesses (45%) indicated they are experimenting with off-the-shelf AI tools as a first step towards broader AI integration into their businesses. 

Key challenges were being unsure how to use AI in a comprehensive rather than piecemeal manner, a lack of in-house expertise to drive and implement AI solutions, and the cost of AI adoption.