Services sector expects modest growth in H2 2025

Overall, 17% of firms anticipate better conditions.

Singapore’s service sector expects business conditions to turn positive for the second half of 2025, according to the Department of Statistics Singapore.

Overall, 17% of firms anticipate better conditions, whilst 15% expect things to worsen, resulting in a net weighted balance of 2% of firms expecting a more favourable business outlook.

The Accommodation (+27%) and Retail Trade (+19%) sectors are amongst the most upbeat. Hotels and retailers are banking on a rise in tourism and consumer activity driven by upcoming concerts, sports events, and the year-end festive season.

The Recreational, Community & Personal Services sector (+19%) is also seeing improved sentiment. Firms providing health and childcare services expect a continued demand in the months ahead.

Conversely, the Transportation & Storage sector (-22%) is facing a gloomier outlook, weighed down by water transport companies.

These firms are cautious about geopolitical risks and expect a slowdown in demand for their services due to front-loading activities by firms ahead of the expiration of the 90-day pause in the US reciprocal tariffs.

That pessimism is only partly offset by more positive views from land and air transport firms.

The Finance & Insurance sector (-14%) is also wary, with banks scaling back expectations amidst ongoing economic uncertainty tied to global policy shifts and US trade actions. However, payment firms are more hopeful, citing rising e-commerce transactions.

The services sector, with a net weighted balance of 7% of firms, foresees higher revenue for July to September 2025.

Firms in the Accommodation industry (+37%) foresee higher revenue for Q3 2025, due to events such as the Singapore Grand Prix.

Similarly, the Wholesale Trade industry (+19%) expects higher operating revenue due to Wholesalers of Computers, Computer Peripheral Equipment and Software, which anticipate revenue growth.

The majority of the industries expect to increase their hiring activities from July to September 2025, with a net weighted balance of 9%.

Firms within the Accommodation industry (+32%) are preparing for a rise in tourist arrivals, whilst companies in Administrative & Support Services (+17%), particularly those in cleaning and landscaping, are gearing up for more demand.

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