A study by UOB has found that more businesses are seeking inflation-related support to cope with rising costs compared to the previous year, as well as looking for funding to initiate digital adoption and sustainability projects.

The UOB "Business Outlook Study 2025 (SMEs and Large Enterprises)" indicates that half of the respondents expressed a desire for support to tackle inflation, an increase from 45% the year before.

The second most sought-after form of support is grants and funding for adopting digital solutions, mentioned by 46% of companies, up from 39% in the 2024 survey. This is followed by incentives for adopting sustainable practices, with 41% of respondents in favor, compared to 29% a year ago. The proportion of companies hoping for support in the form of higher SkillsFuture credits remains unchanged from last year at 42%. A quarter of the respondents wish for more incentives to support export opportunities, up from 20% previously.

UOB's findings are based on a survey of 900 small and medium-sized enterprises (SMEs) and large enterprises across key industries in Singapore in January 2025.

In terms of business confidence, the study found that 82% of companies are more optimistic about the business environment, compared to 78% and 75% in 2022 and 2023, respectively. However, high inflation (31%) remains the top macroeconomic factor affecting businesses, with the professional services and business services sectors being the hardest hit. This is followed by rising operational costs, such as raw materials and rent (30%), and then labor costs (29%). The industries most affected by increased operational expenses are business services and construction and infrastructure.

More companies have pointed out difficulties in retaining customers, accounting for 23% of respondents, up from 19% last year.

Regarding sustainability, businesses believe that the increased cost of products and services offered to end customers (33%) is the biggest barrier to implementing sustainable practices. This is followed by concerns about negative impacts on profits (29%) and a lack of sufficient knowledge to identify and execute the right initiatives for the company (27%).

The study also tracked the awareness and adoption rates of initiatives introduced in past budgets. It found that 83% of companies have applied or plan to apply for initiatives announced in the 2024 budget, up from 78% the previous year. However, UOB notes that there is still a significant gap between awareness levels and the final application of budget support schemes.

Although 29% of respondents said they were aware of the scheme, only 14% of companies have applied or plan to apply for the SkillsFuture Enterprise Credit, making it the most important initiative known to companies.

The next most focused initiative by businesses is the Progressive Wage Credit Scheme, accounting for 21% of companies. However, only 8% of companies have applied or plan to apply. Among companies not utilizing the initiatives in the 2024 budget, the main reason for not doing so is uncertainty about which initiatives are relevant to their business (41%). Others cited a lack of time (30%) or that their business does not require assistance (23%).