Chart of the Day: Corporate profits hit a seven-year high

Profits rose 6.9% and contributed to higher corporate income tax revenue.

This chart from UOB shows that corporate profits have increased healthily and expanded 6.9% YoY in 2017. This is the fastest pace since 2010. The quick pace of corporate profits expansion showed up in the higher-than-expected contribution to government’s 2017 revenue via the corporate income tax revenue.

Corporate income tax (CIT) was the largest source of Singapore's operating income in 2017, taking up 20% of the total.

“With more profits, companies are more optimistic about the future and will be more eager to expand their operations, hire more workers, and increase business investments,” said UOB economist Francis Tan.

Even if wages rose at a slower pace of 3.2% YoY, it is expected to rise at a faster pace this year as companies hire more and pay more to retain existing workers.