More companies in S'pore set to freeze wages as outlook sours: SBF survey

More companies are set to freeze wages over the next year as business confidence weakens because of ongoing economic uncertainties, a Singapore Business Federation (SBF) survey released on Aug 28 found.

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Business satisfaction with the current state of the economy has slipped to 33 per cent, from 35 per cent the previous year; more companies are now expecting conditions to worsen over the next 12 months.

This growing pessimism is translating into more cautious wage policies. The share of businesses planning to freeze wages has risen to 41 per cent, from 35 per cent; those intending to bump up salaries has fallen to 59 per cent, from 64 per cent in 2024's survey.

The wage freeze trend is being driven primarily by smaller companies, with 43 per cent of small and medium-sized enterprises (SMEs) planning to hold wages steady, against just 28 per cent of large companies.

Just over half of companies increased wages in the past year and plan to continue doing so over the next 12 months, with banking and insurance companies alongside manufacturers leading the way in salary hikes.

In contrast, businesses in the construction and civil engineering, and financial and insurance sectors are intending to maintain a wage freeze.

TARIFF IMPACT, BUSINESS WORRIES The perceived impact of US tariffs on Singapore businesses has eased: the proportion rating the effects as "negative" fell to 59 per cent in July, from 81 per cent in April.

Still, overall business confidence weakened in the second quarter, with the Business Sentiment Index slipping 1.1 points to 55.4, from 56.5 in the first quarter.

At the sector level, hospitality, administrative support services and information technology companies remain the most pessimistic about prospects, while health and social services and education businesses are more upbeat.