This box article highlights the latest trends in business costs for firms in Singapore’s manufacturing and services sectors, as well as the outlook for key components of business costs in 2025.

(I) Unit Business Cost in the Manufacturing and Services Sectors

In 2024, unit business cost in the manufacturing and services sectors rose

In 2024, the unit business cost index for the manufacturing sector (UBCI) rose marginally by 0.2 per cent, easing from the 5.8 per cent increase in 2023 (Exhibit 1). The main contributor to the increase in UBCI in 2024 was the “others” cost component, which accounted for 1.2 percentage-points (pp) of the increase. This offset the declines in royalty payments, manufacturing unit labour cost (ULC) and the costs of work given out, which collectively contributed -1.0 pp to the UBCI increase. Meanwhile, the remaining cost components such as non-labour production taxes, utilities and rental costs5 had a relatively small impact on the UBCI, in part due to their small shares in overall business costs. (Please refer to the Annex for the business cost structure of firms in the manufacturing and services sectors.)

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