KUALA LUMPUR (June 29): More than half of small and medium enterprises (SMEs) surveyed in a study by United Overseas Bank (UOB) maintained a positive outlook though smaller firms are more cautious as rising cost pressures continue to shape their priorities.

"While overall sentiment remains positive for businesses, smaller enterprises are adopting a more cautious approach amid persistent economic uncertainties," it said in a statement on Monday.

UOB's study, which consists of 268 business owners and senior executives of varying firm sizes, found that 77% of small and medium enterprises (SMEs) expect business to improve this year while smaller firms have more conservative expectations.

Meanwhile, 77% of businesses view sustainability as very or somewhat important — a six percentage point decrease compared to 2023 — signalling a shift in concern as rising costs pressure businesses to prioritise cost management.

“The UOB Business Outlook Study 2026 shows that cost pressures, including energy and fuel costs, continue to weigh on many businesses,” said Ng Wei Wei, CEO of UOB Malaysia in a statement.

While the study focuses on rising business costs and how enterprises adapt to it, it also highlights businesses that have begun favouring resilience over aggressive growth.

Correspondingly, resilience objectives such as supply chain continuity and operational stability require constant energy management and stability.

“Energy management has become a practical priority, particularly for medium enterprises that are better positioned to execute efficiency initiatives, supported by sector-specific solutions that address their operating needs," Ng added.

As Middle East tensions disrupt global energy supplies, almost 85% of businesses in the manufacturing, engineering and industrial sector have shifted to business strategies prioritising energy management and efficiency.

Two such energy management strategies include solar panels and LED lighting, which 2 in 5 businesses are already adopting.

The study shows that with overlaps, a 48% majority of businesses prioritise reducing energy consumption, with 44% focused on lowering energy costs and 40% prioritising a reliable energy supply for business operations.

Currently, UOB offers firms facing financial difficulties support through relief assistance efforts and the Bank Negara Malaysia SME Stabilisation Relief Facility, an initiative UOB is participating in.

“This support is focused on helping our SME customers manage cash-flow pressures, sustain operations, and navigate evolving market conditions,” said UOB.