Admin services hit by 5.3% labor cost surge as productivity falls

Retail and F&B saw rising labour costs outpacing productivity.

Administrative and support services recorded the highest unit labour cost (ULC) change by sector in 2025, at 5.3%, driven by rising total labour cost (TLC) per worker and falling productivity, according to data from the Ministry of Trade and Industry (MTI).

Retail trade followed closely with a 4.0% increase, due to TLC per worker growth outstripping productivity gains, whilst food and beverage services rose 3.8%.

Other sectoral ULC changes included accommodation at 3.4%, professional services at 3.3%, other services industries at 2.5%, transportation and storage at 1.3%, and finance and insurance at 1.2%.

Services-producing industries recorded a 0.6% increase, and construction rose 2.9%, as TLC per worker growth exceeded productivity gains, the report said.

The real estate sector declined by 1.3%, wholesale trade fell 2.8%, and information and communications decreased 3.5%. Manufacturing recorded a 4.3% ULC decline, as productivity gains offset TLC per worker increases.

The ULC for the economy recorded no change in 2025, moderating from a 1.3% increase in 2024, MTI said.

A 3.4% rise in TLC per worker was offset by a 3.5% gain in labour productivity. Remuneration per worker contributed 3.2 percentage points to the TLC increase.

Projections for 2026 indicate a ULC increase, stemming from a moderation in productivity growth and stable labour market conditions that maintain remuneration per worker growth at a pace similar to 2025.