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Overall business outlook for 2026 is 10 percentage points below 2025 levels.<\/strong><\/p>\n Singapore business confidence has fallen to its lowest level in three years, with only 69% of businesses reporting positive sentiment about the current business environment, according to the UOB Business Outlook Study H1 2026.<\/p>\n The study, which adopts a biannual cadence from 2026 to better track fast-moving geopolitical and economic shifts, found that geopolitical tensions are now a key concern for one in four businesses, whilst rising operational costs affect one in three. Both indicators have increased sharply since 2024.<\/p>\n The US-Iran conflict has been identified as the most significant macroeconomic shock of the first quarter of 2026, contributing to a spike in crude oil and natural gas benchmarks alongside reported supply disruptions in petrochemical feedstocks and by-products.\u00a0<\/p>\n The overall business outlook for 2026 remains 10 percentage points below 2025 levels.<\/p>\n Large enterprises<\/a>, with broader international footprints, have been more exposed to tariff pressures compared to small and medium enterprises. Sectors including manufacturing, engineering, industrials, construction, and real estate continue to face more acute pressures in operational and manpower costs.<\/p>\n In response, businesses are increasingly prioritising efficiency, cited by 36% of respondents, and transformation, cited by 39%, as they seek to strengthen their foundations in a volatile environment.<\/p>\n Whilst 93% of large enterprises have adopted digitalisation, only 69% of small enterprises have done the same, resulting in a 28-point gap in digitalisation success between the two groups. The cost of implementation, system compatibility, and cybersecurity concerns remain the most commonly cited barriers.<\/p>\n