With business costs have generally increasing, Singapore is no longer a low-cost business location as the government recognised.
Trade and Industry Minister Lim Hng Kiang said this in a written reply to MP for Ang Mo Kio GRC, Inderjit Singh.
Mr Singh asked if Mr Lim could provide data on the changes in labour and rental costs, and whether the increasing costs would make it difficult for Small and Medium-sized Enterprises (SMEs) to remain viable in the Singapore economy.
Between 2007 and 2011, nominal average monthly earnings raised at a compound annual growth rate of 3.5 per cent.
Rentals of factory space also increased at a compound annual growth rate of 7.3 per cent.
Unit labour costs for the overall economy went up at a compound annual growth rate of 1.5 per cent, but dipped 2.9 per cent in the manufacturing sector.
Firms have coped well with increasing costs through restructuring and improving productivity and assured that the government has in place broad-based and sector-specific programmes to help businesses remain competitive, said Mr Lim.
This is done through upgrading their capabilities and improving productivity, which will help moderate costs.
Mr Lim added that SMEs which restructure by moving up the value chain and upping productivity will remain viable in the Singapore economy.