SINGAPORE: Singapore’s chief executive officers (CEOs) are facing a significant dip in confidence, with optimism levels falling to 54% in March 2025 from 72% in September 2024, according to a recent survey by Ernst & Young (EY). The decline is attributed to mounting concerns over rising prices, inflationary pressures, and supply chain disruptions.
This sharp drop in sentiment stands in contrast to the global outlook, where CEO confidence has climbed to 73.5% from 70.5% over the same period. Despite persistent geopolitical tensions, technological advancements, and sustainability challenges, leaders worldwide remain cautiously optimistic.
Singapore’s CEOs are grappling with the challenges of a high-cost business landscape. Inflationary pressures and increasing operational expenses have left many leaders uncertain about their companies’ short-term performance. Supply chain instability has further complicated the situation, affecting profitability and planning.
However, the focus on transformation remains strong.
More than half of Singaporean CEOs (56%) expressed confidence in their ability to adapt their business models for future growth successfully.
Yet, 44% acknowledged the risk of falling short of their transformation goals.
With profitability under strain, workforce reductions may be inevitable for many firms. The survey revealed that 55% of Singapore’s CEOs anticipate downsizing their workforce within the next year.
This figure is higher than the global average of 42%, underscoring the local challenges businesses face.
Investments in people and technology are still viewed as essential for long-term success. While companies remain committed to innovation, cost management and resource allocation will be critical in navigating the economic landscape.
The appetite for mergers and acquisitions (M&A) has also diminished. Only 40% of Singaporean CEOs plan to pursue M&A activity in the next 12 months, compared to 48% in the previous survey. This cooling interest reflects a cautious approach, as companies prioritise internal restructuring and operational resilience.
Nevertheless, transaction initiatives remain on the agenda for most leaders. An overwhelming 98% of Singapore’s CEOs expect to explore various opportunities such as divestments, joint ventures, or strategic partnerships to maintain growth momentum.
Despite the challenging environment, the commitment to long-term transformation signals resilience among Singapore’s business leaders. While short-term uncertainties persist, companies that successfully adapt their strategies, invest in innovation, and optimise operations will be better positioned to navigate the evolving economic landscape.
EY’s findings suggest that while CEO confidence in Singapore has waned, the determination to drive business transformation remains a critical focus. Balancing cost management with growth initiatives will be key for leaders aiming to weather the economic headwinds and emerge stronger.