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 2022.
(1) Unit Business Cost in the Manufacturing and Services Sectors
In 2021, unit business cost in the manufacturing sector fell, while that in the overall services sector rose
In 2021, the unit business cost index for the manufacturing sector (UBCI) fell by 3.3 per cent. The main contributors to the decline were a fall in the costs of the “others” component3, work given out and royalties4, with their contributions collectively accounting for 4.0 percentage-points (pp) of the decline in the UBCI. In addition, a drop in the manufacturing ULC also contributed 0.3pp to the decline in the UBCI. These declines more than offset the positive contribution of utilities cost (+0.9pp) to the UBCI. Utilities cost had increased in tandem with the rebound in global oil prices, which was in turn due to the global economic recovery amidst tight supply conditions.
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