Singapore's biggest companies continued to see record sales last year, but that did not prevent profit margins from being squeezed.

The combined revenue of Singapore's largest 1,000 firms hit $2.75 trillion last year, up 13.9 per cent from $2.42 trillion a year ago, according to a report by DP Information Group released on Thursday.

But while sales were booming, the firms' total earnings rose by just 2.1 per cent to $149.8 bilion last year. This was slightly down from a 2.2 per cent increase in the same period a year ago.

DP's study was based on more than 70,000 sets of audited financial statements for the year ended May 31.

The rise in turnover was mainly driven by the services sector, which recorded a 7.5 per cent increase to $83.1 billion last year.

DP Information found that the sector's strong performance was mainly bolstered by healthcare and medical companies, thanks to the growing silver population in Singapore.

Of the 11 industries surveyed, eight recorded a fall in combined earnings, which fell to 5.09 per cent last year. This was down from an overall profit margin of 5.78 per cent a year ago.

Ms Chan Yew Nah, managing director of DP Information Group, said rising cost pressures from rents and manpower were the primary reasons hitting the firms' bottom line.