Singapore productivity falls sharply, average wages drop to 2007 level

Singapore productivity has gone down sharply, according to the latest government data. It started before the recession, dipping slightly in 2007, then plummeted last year — and hasn't hit bottom yet.

Average wages have also fallen back to 2007 levels. The "average nominal earnings per employee by industry" was 3,609 Singapore dollars (about $2,575) in the second quarter of this year — less than the 3,773 Singapore-dollar average pay cheque in 2007.

See how much productivity has fallen?

All the figures here are from the Monthly Digest of Statistics Singapore, October 2009.

Productivity fell by 0.8 percent in 2007, then by 2.9 percent in the first quarter of 2008 before things went from bad to worse. The drop was 7.1 percent in the second quarter, even worse — 9 percent in the third quarter — then went into double digits, plunging 11.9 percent in the fourth quarter and a shocking 14.7 percent in the first quarter of 2009. Singapore was then in full-blown recession.

But the slide did not stop even when the recession ended. Productivity fell by 6.2 percent in the second quarter. Back to single digits at last!

No wonder the government is talking up a storm about boosting productivity.

Frankly, the Finance Minister, Tharman Shanmugaratnam, is worried.

As Singapore becomes a high-income economy, it faces the difficulty of maintaining high rates of productivity growth, he told the Financial Times, reports Channel NewsAsia.

The services sector is touted as the future hope, but it was the one where productivity continued to fall in the second quarter.

Manufacturing recovered in the second quarter, with productivity up 3.8 percent after falling by as much as 23.9 percent in the first quarter.

Construction made productivity gains both in the first quarter (3.9 percent) and the second (4.4 percent) after falling 3 percent in the fourth quarter of last year.

But service sector productivity fell throughout last year and it has been falling rapidly since late last year. It fell by 8.6 percent in the fourth quarter of last year, 10.3 percent in the first quarter of this year and 8.2 percent in the second.

Not only the hotel and retail sectors have been badly hit.

Financial services fell by 15.1 percent in the fourth quarter of last year and by 12.2 percent in the first quarter and 5.8 percent in the second quarter of this year.

Information and communications fell by 1.9 percent, 4.4 percent and 4.7 percent during the same periods.

Business services fell by 6.1 percent, 4.1 percent and 2 percent.

Here is the wages chart.

Average monthly nominal earnings per employee by industry

(All figures in Singapore dollars)

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