SINGAPORE – Rising supplier prices are a worry for Ms Rosemary Chng, founder of vitamins and health supplements business Elixir Botanica.
It is why she expects the business outlook to remain the same, even though her business is doing well now.
“It’s crazy that the suppliers do price adjustments every three months. But I can’t do that, as my customers won’t like it. This is why it’s very critical for survival that I increase my customer base, if I can’t increase prices,” she said.
Ms Chng is among owners of Singapore small and medium-sized enterprises (SMEs) who are grappling with global supply chain disruption issues.
An OCBC Bank poll found that against the backdrop of the US tariff negotiations, 57 per cent of more than 1,600 SME business owners surveyed in the second quarter of 2025 expect the outlook for the rest of the year to worsen or remain unchanged. The remaining 43 per cent of the respondents expect an improvement in the second half of 2025, according to findings from OCBC’s SME Business Outlook poll released on July 16.
The bank also released the latest OCBC SME Index, which provides a barometer of SME business health and performance by looking at the transactional data of more than 100,000 OCBC Bank SME customers in Singapore with annual sales turnover of up to $30 million.
In the second quarter of 2025, the SME index improved, showing that the performance of SMEs held up relatively well against challenging economic conditions and a volatile geopolitical landscape.
The index was in the expansion range at 50.5, up from 49.9 in the previous quarter. A score of 50 indicates no change relative to the same period from the previous year, while a score above 50 reflects improved business health, and a score below 50 indicates deterioration.
Overall collections grew by 5.8 per cent year on year, while payments grew by 4.5 per cent year on year.
In the externally oriented sector, wholesale trade, manufacturing and resources were in expansion, with improved performance from the previous quarter. Domestic-facing industries such as food and beverage, business services, and building and construction also supported growth.
However, transport and logistics, education, and information and communications technology lagged growth and were in contraction.
Ms Chng, who took part in the OCBC SME Business Outlook poll, said one positive outcome is that rising supplier costs have spurred her to look into manufacturing her own key products so she has better cost and supply control.
“With increasing operational costs all over, I have to make sure the company is able to cover these costs and still ensure my staff are well paid and paid on time,” said Ms Chng.
She added that her landlord has been an understanding one, who has helped her in containing the running costs of her business over the last eight years.
In arriving at its findings for its SME Index, OCBC uses an estimate of real gross domestic product growth based on available economic data for the current quarter and forecasts of explanatory variables for the remaining term, called GDP Nowcast.
The GDP growth Nowcast based on the OCBC SME Index for the second quarter of 2025 is around 4.5 per cent, up from the 4.1 per cent registered in the previous quarter.
This is aligned to the second quarter of 2025 GDP advance estimates released by the Ministry of Trade and Industry at 4.3 per cent, according to OCBC.
The business outlook for SMEs in the second half of 2025, however, is likely to remain subdued as tariff-related uncertainties persist, said OCBC. Additionally, the front-loading of exports over the past two quarters will probably give way to lower demand from further trade disruptions and the weakening US dollar.
Marine equipment supplier company OS Supplies is an example of what is going on on the ground. Its director, Mr Bala, said the company has shown strong growth compared with the same period in 2024, achieving about $5.5 million in revenue as at June.
“However, in the next six months, we expect cost pressures due to currency fluctuations, rising insurance, and freight charges caused by global conflicts. These factors may impact our margins despite steady demand,” he said.
