Middle East conflict threatens SME survival beyond six months, SBF poll says

A 44-percentage point gap between SMEs and larger firms shows confidence lag in managing shocks.

Only 36% of Singapore’s small- and medium-sized enterprises (SMEs) reported confidence in managing ongoing volatility, compared with 78% of large firms, according to a Singapore Business Federation (SBF) poll.

This comes as two in three businesses report moderate to severe impact from the ongoing Middle East conflict, with 54% saying they are very or extremely concerned about long-term viability if current conditions persist beyond six months.

The poll also found that 66% of firms cite energy prices as the main pressure point, followed by shipping and freight costs at 54%, and weaker customer demand at 48%.

One in three SMEs report significant to severe disruption, compared with half of large firms reporting moderate impact.

In terms of cost and risk management, one in two businesses have raised prices or renegotiated contracts, the SBF poll said.

SMEs prioritise cash conservation, with 40% taking this approach, whilst larger firms deploy risk management measures, such as fuel and foreign exchange hedging (33%), and invest in energy efficiency (17%).

Differences in exposure also appear in insurance and security-related costs, which affect 42% of large firms compared with 17% of SMEs.

Businesses identify working capital support and logistics cost management as the main areas for further assistance, cited by 41% and 35% of respondents, respectively.

A higher Corporate Income Tax rebate is seen as the most useful existing measure, with 60% of firms citing immediate value, followed by the Energy Efficiency Grant (43%), and support to defray cost increases in government projects (31%).

The findings were presented at the “Tariffs and Energy Uncertainty: What Now, What’s Next?” dialogue on 21 April, attended by more than 150 business leaders, where participants discussed responses to tariff measures and energy-related uncertainty.

This includes supply chain diversification, market expansion, and approaches to managing tariff exposure and operational risk.

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