Business Sentiments of Local Companies (October to December 2023)

- All Industries -  |  29 Jan 2024

Business sentiments remained weak in October to December 2023; pessimistic outlook for the year ahead 

Infographics can be found at the end of the article.


In 2023, Singapore businesses kickstarted the year amid an uncertain global landscape. As the year progressed, there was a modest upturn in revenue and manpower during the third quarter, suggesting a glimmer of hope and recovery.

In their statement, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) kept to their inflation outlook for both 2023 and 2024. In 2023, headline inflation is expected to average around 5 percent, and core inflation around 4 percent. In 2024, headline inflation is expected to average between 3 and 4 percent and core inflation between 2.5 and 3.5 percent. When the transitory effects of the goods and services tax (GST) hike to 9 percent is excluded, headline inflation is projected to come in at between 2.5 and 3.5 percent, and core inflation between 1.5 and 2.5 percent. 

While economists agree that MAS would not change monetary policy settings at January’s monetary policy review, they remained mixed on whether the central bank will ease, or further tighten, monetary policy for the rest of 2024.  

Moody’s Analytics economist Denise Cheok expects MAS to loosen monetary policy settings by the second half of 2024, and others expect the easing as early as from the scheduled policy meeting in April. However, economists from Standard Chartered Asia and Barclays believe further tightening could be in the cards instead. 

In addition to the uncertainties over the US and China’s growth, the conflict in the Middle East is another potential downside risks to Singapore’s economy. Analysts still worry that the Israel-Hamas conflict may threaten to push up energy costs, even as Singapore gas, electricity and water tariffs are set to rise. 

DON’T MISS OUT: IndSights’ in-person event (Navigating The Business Landscape in 2024)


IndSights Research found that Singapore companies held bearish sentiments amid global and economic uncertainties. The net balance of current economic, and business sentiments, dipped from the previous quarter. Future economic and business outlook were similarly downbeat.   

Looking ahead, companies expected revenue to turn negative. Companies expect to continue growing manpower but with a slight dip from the previous quarter.  

READ ALSO: Want to find out what 2023 looked like for Singapore businesses and what are the trends to look out for? Download our 2023 Year-in-Review report.


Less companies are feeling optimistic about current economic situation 

Positive sentiments towards the Singapore economy decreased to 11 percent in the period of October to December 2023 while the future economic outlook was pessimistic.

Chart 1 of net balance score of perceptions of the Singapore economy October to December 2023
Chart showing the net balance score of the perceptions of the Singapore economy from October to December 2023

We also observed that local companies were pessimistic about the current and future business situation.

Chart 2 of net balance score of perceptions of Singapore’s industry October to December 2023
Chart showing the net balance score of the perceptions of the Singapore’s industry from October to December 2023

In addition, IndSights findings also echoed Singapore Business Federation’s (SBF) National business survey 2023/2024, which found only 25 percent of businesses were confident that the economy will improve in the next 12 months, compared to 41 percent a year before. SBF also reported weakened local business outlook for the year ahead. 

READ ALSO: Report on Singapore’s Business Sentiment for the period July to September 2023


Revenue fell; continued expectations for tighter labour market 

Revenue contracted in October to December 2023 and Singapore businesses were cautious about the expected revenue change in the next quarter of January to March 2024. Looking ahead, firms also reported that they expect a 4 percent dip in manpower needs in the first quarter of 2024 as compared to the fourth quarter of 2023. 

However, The Business Times predicts that overall employment growth should stay supported by the domestic-oriented services and travel-related sectors, and resident unemployment rate is unlikely to increase substantially.  

In addition to the softening trend, ASEAN Briefing anticipates that wage growth and bonuses will slow, citing reasons including Singapore’s expected recovery, tightened manpower policies, and sector-specific rebounds.

READ ALSO: Revolutionising Singapore’s healthcare amidst demographic shifts and economic demands


Rising business costs remains the top business challenge concern 

Streamlining business processes was the top strategy adopted by companies for the past four quarters. In the latest quarter, other business strategies that companies reported were that they intend to expand business locally, and to strengthen employees’ skills and capabilities.

Top three business strategies in the next twelve months
Top three business strategies in the next twelve months

Singapore companies cited rising business costs, uncertain or unfavourable economic factors, and manpower acquisition as their top challenges. These concerns have remained among the top challenges for companies in the past four quarters. 

Anecdotally, rising business cost such as rental and manpower wages have also been among the most common comments from business leaders in our Industry Chats. Besides rental and wages, some smaller businesses also mentioned other unseen outlays increase such as transport and software subscription costs.

READ ALSO: If you would like to contribute to our Industry Chats and share about your business experiences, challenges and suggestions, we would love to hear from you. Please contact so that we can make the arrangements with you.


Singapore companies are aware of sustainability, but few have plans to implement 

Half of the companies surveyed are aware of how they can adopt green practices in their business. In addition, 43 percent reported that they will be preparing to equip employees with related knowledge through training. 

Furthermore, 15 percent of firms reported that they have no firm plans but are open to adopting sustainable practices and plans. It seems that the journey towards sustainability continues to be challenging for Singapore businesses. According to NTUC LearningHub’s Report on Sustainability, the following are some of the challenges businesses faced in adopting sustainable business practices: 

  • About 49 percent of businesses found it challenging to align sustainability goals with their business objectives. 
  • Approximately 47 percent cited a lack of expertise as a barrier to implementing sustainability strategies. 
  • Around 39 percent were unsure how to measure their sustainability strategies outcomes. 
  • For businesses that did not have sustainability strategies, 41 percent said that a lack of budget was the top reason. 
  • Lack of Specialized Expertise and insufficient knowledge: Another 41 percent cited a lack of specialised expertise, while about 30 percent acknowledged that they did not have sufficient knowledge of the issues.
Companies that have no plans but are open to adopting sustainable practices in their business
Companies that have no plans but are open to adopting sustainable practices in their business

Many business leaders from our industry chats shared that they hold firm convictions about the importance of sustainability in their personal lives, for some, this belief has influenced how they run their business operations. While the government tries to nudge organisations towards a more sustainable path, it is also apparent that it may find it more effective to better support ground up initiatives and education, to help this movement gain more momentum.

READ ALSO: Singapore yellow biotechnology company creates new hope for sustainable food production


What can Singapore companies do to face the myriad of challenges? In an artificial intelligence (AI) tech poll conducted earlier this year, 63 percent of companies polled found AI currently applicable to their work. Organisations reported benefits from AI adoption, including increased efficiency, productivity, and overall performance. Developing digital solutions has surfaced as one of the key strategies to ease many of the challenges. 

Singapore is also known for its strong support for businesses, especially in the areas of digitalisation. Companies should leverage the many support programmes that Singapore offers for that extra boost. The following are some of the programmes firms may consider: 

  1. Startup SG Tech (Micro) – Provides funding for startups to carry out Proof-of-Concept and Proof-of-Value trials for innovative technologies. 
  1. Productivity Solutions Grant – Businesses can access a wide range of pre-scoped solutions, including IT solutions, equipment, and consultancy services (e.g. job redesign). Support is up to 50 percent of eligible costs for local SMEs, where companies can receive up to $30,000 to improve business productivity. 
  1. Advanced Digital Solutions – Businesses can access up to 70 percent funding support to adopt advanced digital solutions leveraging Artificial Intelligence (AI) and Cloud technologies. 

Singapore, as a global business hub known for its resilience, innovation, and adaptability, may need to redefine the way businesses operate and thrive in the coming years. The question that is on many of our minds is: how can we position ourselves to not just to succeed but to lead in a rapidly changing global economy in the years ahead?

READ ALSO: IndSights compiles a list of the lastest support programmes for businesses and the list is regularly updated. View the latest business resources here. 


About the Study 

Our recent survey was conducted from October to December 2023 with 1,627 business leaders from 23 industries: Environmental Services, Food Services, Logistics, Retail, Information & Communications, Security, Wholesale Trade, Real Estate, Air Transport, Land Transport, Sea Transport, Hotels, Construction, Financial Services, Professional Services, Food Manufacturing, Healthcare, Education, Electronics, Energy & Chemicals, Marine & Offshore, Precision Engineering, and Aerospace. 

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