From The Straits Times
By Jeremy Au Yong
Published on 16 Mar 2010
SINGAPORE recorded its first increase in labour productivity in two years, following the strong turnaround in the economy.
Workers' productivity rose by 3 per cent in the fourth quarter of last year, after eight consecutive quarters of decline dating back to the fourth quarter of 2007, according to a Ministry of Manpower (MOM) report yesterday.
Labour productivity is a measure of how much output each worker produces in a given time.
And although there is reason to cheer the positive development, economists were quick to caution against any exuberance over the change.
They say it is too early to sound any victory bells that Singapore is en route to achieving the Government's target to raise annual productivity growth from the current 1 per cent, to between 2 per cent and 3 per cent over the next 10 years.
Said Associate Professor Hui Weng Tat of the Lee Kuan Yew School of Public Policy: 'In an upturn, when output or price of goods increases and employers have not yet hired more people, productivity will naturally go up.
'Similarly, in a downturn, when output decreases and employers have not retrenched, productivity will go down.'
While noting that total employment grew by 37,500 in the final three months of last year, Prof Hui said more time and data were needed before any substantive conclusion could be made on productivity.
'The challenge now is to see whether we can keep this up,' he added.
Similarly, Nanyang Technological University labour economist Tan Khee Giap said productivity figures are not significant during exceptional times.
'In a sudden upturn, labour productivity will always go up. You need to look at it during normal times, when the economy is in a steady state. Any increase then would be meaningful,' he added.
The MOM report also showed signs that salaries are starting to stabilise.
Nominal earnings declined at a slower pace, dipping by 1.6 per cent from October to December last year, compared with 3 per cent in the previous quarter. Taking into account inflation, real wages dipped 0.9 per cent in that quarter.
The report updates the preliminary figures MOM issued in January, giving the final snapshot of the labour market for the whole of last year.
Singapore ended the year with a workforce of 2.99 million, meaning total employment grew by 37,600 despite the downturn. The reason: strong job growth in the second half of the year outpaced job losses in the first six months. Interestingly, local employment rose 2.2 per cent, despite the gross domestic product shrinking by 2 per cent last year.
The number of citizens and permanent residents in the workforce grew by 41,800 to end the year at 1.94 million. In contrast, foreign employment declined by 4,200 or 0.4 per cent.
The overall jobless rate also fell back to pre-crisis levels: down from a high of 3.4 per cent last September to 2.1 per cent in December.
Human resource experts expect the job situation to improve further.
Said Ms Lynne Ng, regional director of Adecco South East Asia: 'As we near the end of the first quarter of 2010, early signs are that we will see continued employment growth into the second quarter - especially with the continued hiring of service and hotel and restaurant staff for the integrated resorts.'
News & Opinions -
News Updates
