According to a Singapore Business Federation (SBF) survey, two in three businesses in Singapore have been moderately to severely impacted by the war in the Middle East. This conflict has increased energy and logistics costs. Released on April 22, 2026, the findings show a struggling economy. A far-off geopolitical crisis is shaking up warehouses, balance sheets, and boardrooms all over the city-state.
What the Survey Found
As per the results of the survey of 254 firms, 66 per cent of these respondents stated that their companies have been affected by increasing energy costs, while 54 per cent indicated higher costs of shipping and transportation. Over one-half of the respondents, 48 per cent, also claimed that their customer demand had decreased due to the disruptions that occurred in the economy because of the war.
However, these issues are not the only worries for the company managers who took part in the survey. Over half of the respondents noted that they are concerned about their future sustainability in case the macroeconomic situation does not improve in the next six months.
SMEs Bear the Brunt
The survey highlighted an increasing gap between small and large enterprises. SMEs faced more disruptions and felt less sure about handling the crisis than large companies. They believed rising labour costs affected them more, adding stress to their finances. Over half of the SMEs noted that they suffered a drop in income from Singaporean customers. However, only one-third of the large businesses faced such a situation.
Only about a third of SMEs believe that they are confident in handling economic instability, while 78 percent of large firms say otherwise. This disparity indicates that, despite having the means to cope, big businesses are more resilient during tough times, whereas small business owners are struggling to cope on their own.
“The most recent survey result by SBF suggests a widening gap in confidence levels between small and medium-sized enterprises (SMEs) and larger firms,” said SBF chief executive Kok Ping Soon. “While the latter group is better prepared for increasing costs, the former finds itself grappling with instability in energy prices and logistics.”
How Businesses Are Adapting
In spite of such pressure, companies have not remained inactive. Nearly half of all businesses surveyed indicated their intent to increase prices and/or renegotiate terms to safeguard their bottom lines, while 40 per cent of small and medium enterprises were busy saving their money to sustain themselves. Big companies have taken up more sophisticated risk management measures, with a third of them hedging against fuel and foreign exchange, and 17 per cent using energy-saving measures.
This different approach is caused by the following structural fact: big companies can afford to hedge risks, whereas small firms are bound to make quick decisions.
Government Support and What Businesses Need More Of
The 40% corporate income tax rebate provided under Budget 2026 has been raised to 50%. The firms have also found benefit from the Energy Efficiency Grant, which offers financial assistance towards investments made in energy-efficient machinery. According to Kok, the businesses required additional working capital and also had logistical concerns.
More than two in five businesses are seeking working capital assistance, while over a third are requesting help with logistics cost management, reflecting concerns that current conditions may extend beyond short-term disruption.
The Broader Global Picture
It’s not just Singapore either. The crisis in the Middle East is already affecting the global supply chain, and without a definite solution in sight, uncertainty will keep being the theme of our global economy. The effects of the war go way beyond the borders of that region.
Another recent survey conducted by the Singapore National Employers Federation found that most bosses were facing mounting cost pressures due to an energy price shock triggered by the Iran war. Some businesses have frozen hiring, while others have turned to cutting bonuses, allowances, and benefits.
The Bottom Line
The SBF survey is a timely reminder that modern conflicts are not just military events — they are economic ones too. For Singapore’s business community, especially its SME backbone, the Middle East war has become a very local crisis. Without sustained government support and proactive risk management, many firms risk crossing from disruption into genuine distress.
