Manpower, rent and weak demand drag businesses’ profits

Rising costs push Singapore firms into profit decline

Only 4% of firms surveyed by the Singapore Business Federation (SBF) reported higher profitability over the past 12 months, whilst 34% indicated a decline.

The aggregate profitability-expectations score fell 2.9 points to 48.5, measured by the Business Sentiment Index (BSI), signalling subdued margin expectations for 2026.

Cost pressures remain the primary challenge. About 63% of respondents cited rising manpower expenses, 44% pointed to demand uncertainty, and 40% reported higher rental costs as key constraints. Logistics and supply-chain costs also contributed to tighter margins.

The impact differs by sector. Hotels, restaurants, retail and wholesale trade reported the lowest profitability expectations, whilst banking, insurance and real estate firms recorded scores above 59. SMEs were generally more pessimistic than large firms, with 38% expecting deteriorating conditions compared with 34% of large firms, according to SBF's findings.

Firms are adjusting to these pressures through cost-saving measures, price adjustments and inventory management. Hiring intentions and wage growth plans have cooled, with only 36% of companies planning to expand headcount and 41% considering wage freezes over the next 12 months.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia