SINGAPORE - Labour productivity contracted last year, extending its recent tepid performance.
Singapore's labour productivity declined 0.8 per cent in 2014, according to data released on Tuesday by the Ministry of Trade and Industry (MTI). This came after a slight 0.3 per cent uptick in 2013.
Productivity contracted 1.5 per cent in the last three months of 2014 - the third consecutive quarter of decline. All sectors saw a dip in productivity, except for the finance and insurance sector which registered strong productivity growth of 5.1 per cent.
The latest data comes amid ongoing efforts to restructure the economy and raise productivity.
The Government has set a target of 2 to 3 per cent productivity growth over a 10-year period to 2019. Labour productivity is expected to have risen by just over 2 per cent a year on average for the first five years of that period. Yet almost all of those gains were achieved in 2010, when the economy recovered strongly.
An MTI study released on Tuesday alongside the Economic Survey of Singapore showed that for the 2009 to 2014 period, export-oriented sectors turned in a stronger productivity showing than their domestically-oriented counterparts.
However, in the same period, domestically-oriented sectors like construction and retail also employed an increasing share of the workforce. This weighed down overall labour productivity growth, which is calculated by measuring value added per worker.
The study also found that a slowdown in machinery and equipment investments, as well as the number of less-skilled workers rising relative to skilled workers, also dampened labour productivity growth in the 2009 to 2014 period.
This means Singapore must press on with efforts to restructure the economy towards more productive sectors, the study concluded.
This entails equipping the workforce with skills to take on higher value-added jobs, while helping companies invest in capital and improve business processes.