Rising labour costs hit company earnings
Labour-intensive sectors squeezed by staff crunch, foreign worker levies
Rising labour costs, due mainly to higher foreign worker levies, are denting the earnings of companies across the board in this financial reporting season.
A check on the financial statements of listed companies - from the largest conglomerates to small and medium-sized enterprises - also revealed that the manpower crunch is not letting up.
Companies in labour-intensive sectors such as food and beverage, logistics, and retail and construction continue to be the hardest hit.
In the construction sector, companies such as Hiap Seng Engineering, Hor Kew Corporation and UE E&C said higher foreign worker levies are contributing to escalating operating costs.
The underlying economic growth story is intact, and this is supportive of businesses searching for new opportunities, and those who are able to utilise their resources more efficiently.
- CIMB economist Song Seng Wun