OCBC SME Index slips to 49.9 in Q1 after three quarters of growth

The outlook for the next quarters is expected to weaken further.

The OCBC SME Index slipped to 49.9 in Q1 2025 from 50.7 in Q4 2024, entering contractionary territory after three consecutive quarters of expansion.

This signals a downward shift driven by a weakening outlook, now exacerbated by US trade tariffs and growing uncertainties in global trade.

Overall collections grew by 1.7% year-on-year, whilst payments remained unchanged.

OCBC said the business outlook for SMEs is expected to weaken further in the quarters ahead, following the developments on US tariff measures.

In addition, the subdued outlook on the US dollar will likely impact local SMEs in the outward-oriented sectors such as ICT, transport and logistics, and wholesale trade.

These industries have on average over 40% of collections accounted for by overseas customers, of which 7% are directly received from payers based in the US. The majority of these overseas collections are also denominated in US dollar.