Index to Track Business Costs by Category

Mr Kwek Hian Chuan Henry asked the Minister for Trade and Industry (Trade) whether the Government will consider having trade councils or business chambers work with professional think-tanks to come up with an annual sectoral business costs index to track business costs by category, such as rentals, wages, transportation, raw materials, equipment, fees and charges, to assist the Government in deriving sector-specific policies for transforming our industries.

The Government publishes a range of data on business costs on a regular basis, from the business cost structure of companies in the key business sectors, to trends in key business cost components, such as labour and rental costs. For instance, the Department of Statistics (DOS) compiles and publishes the Unit Labour Cost Index, which measures the change in labour cost per unit of real output, at the overall economy level and for key business sectors on a quarterly basis. Similarly, rental indices for industrial space and commercial space are compiled and published by JTC and the Urban Redevelopment Authority respectively on a quarterly basis.

Specifically for the manufacturing sector, DOS compiles an overall Unit Business Cost (UBC) Index on a quarterly basis. The main components of the UBC Index are labour cost, services cost and Government rates and fees. The services cost component, in turn, includes work given out, rentals, utilities and transport costs. As for overall business cost trends in the services sector, the Monetary Authority of Singapore estimates and tracks the Unit Business Cost Index for the Services Sector, which is used alongside other cost and price indicators for monetary policy purposes. For a summary of the business cost structure and latest trends in business costs, Members can refer to the Economic Survey of Singapore published by MTI.

At the same time, the Government welcomes private sector initiatives to deepen insights into business trends that would inform and facilitate industry transformation efforts. For instance, the Local Enterprise and Association Development (LEAD) programme, which is co-administered by SPRING and IE Singapore, supports Trade Associations and Chambers in driving industry development initiatives. These include intelligence and research projects that would lead to the development of industry-specific solutions.