Business Cost Conditions in Singapore's Manufacturing and Services Sectors

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 2026.

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

In 2025, unit business cost in the manufacturing sector rose slightly, while unit business cost in the services sector declined

The unit business cost index of the manufacturing sector (UBCI) edged up by 0.1 per cent in 2025, easing from the 3.2 per cent increase in 2024 (Exhibit 1). The main contributors to the increase in UBCI in 2025 were the cost of work given out, royalty payments and “others” costs, which collectively accounted for 2.9 percentage-points (pp) of the increase. By contrast, declines in the manufacturing unit labour cost (ULC) and utilities cost collectively contributed -2.7 pp to the increase in UBCI. Meanwhile, the remaining cost components such as non-labour production taxes and rental cost 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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