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More companies in Singapore set to freeze wages as economic outlook worsens: SBF survey
The 2025 National Business Survey found that just over half of them indicated that employees' salaries will stay the same over the next 12 months.
PHOTO: AsiaOne file
PUBLISHED ONNovember 27, 2025 5:47 PM
BYChing Shi Jie
More companies in Singapore are set to freeze wages over the next year amid growing pessimism about the economy, according to a Singapore Business Federation (SBF) survey released on Thursday (Nov 27).
The 2025 National Business Survey, which drew responses from 553 businesses across key sectors, found that just over half of them — 55 per cent — indicated that salaries will stay the same over the next 12 months.
It is a dip from the 48 per cent of the firms which said that they have frozen wages over the past 12 months.
This comes as only 4 per cent of businesses saw an increase in profitability over the past year, according to SBF — down from 7 per cent in 2024.
Just under two-thirds of businesses — 62 per cent — saw no change in profitability, a 12 per cent hike from the previous year.
SBF said it suggests a degree of resilience in managing margins amid cost pressures.
The survey also found that more businesses — from 35 per cent in the second quarter of 2025 to 37 per cent in next quarter of the year — are expecting the economy to worsen over the next 12 months.
This sentiment is shared by more small and medium-sized companies at 38 per cent, compared to 34 per cent of large companies.
Hotels, restaurants and accommodation, retail and education sectors showed the highest pessimism towards Singapore’s economic prospects for the next 12 months.
Overall, all sectors saw declines in business sentiments, with hotels, restaurants and accommodation industry having the most cautious outlook. It is followed by retail trade, IT and related services.
"Business sentiment declined across all sectors in Q3 2025, indicating the shared sense of caution as businesses anticipate softer economic growth aid slowing front-loading and trade activities, as well as ongoing tariff-related uncertainties," said SBF.
But there are some bright spots.
The banking and insurance sector was the most optimistic. It also has the highest revenue expectations.
The hiring outlook for all sectors remains unchanged from the previous quarter, as businesses plan to maintain current workforce levels over the next six months with limited appetite for headcount expansion.
Concerns over the impact of the US tariffs have also fallen to 57 per cent in October compared to the 81 per cent when it was first announced in April.
The proportion of businesses indicating that they perceive the tariffs will have no significant impact has also increased from 15 per cent to 41 per cent.
Kok Ping Soon, chief executive officer of SBF, said concerns over the US tariffs have "softened", which suggests that companies have begun adjusting to the new "trade dynamics" or are experiencing less disruption than initially expected.
"However, manpower costs, uncertainty in external demand and rental costs are weighing down business," he said.
"Businesses are calling out for more support in managing costs, cash flow and workforce development in Budget 2026.It reflects their desire to maintain resilience while investing in capability building."
