Here's proof that Singapore's productivity is stuck under pressure

Will it be over anytime soon?

According to a report by J.P. Morgan, while hiring was more diversified in 4Q than usual, such strength during a period of economic contraction is a bit surprising. It suggests that productivity (measured as output in the GDP accounts divided by employment in that sector) fell in 4Q for a second straight quarter.

Here's more:

Despite soft growth in 2H, hiring was strong. The unemployment rate fell from 2.1% sa in 2Q to 1.8% in 3Q and 4Q. In 4Q, hiring was particularly strong, as 39,200 new jobs were added. Since the global financial crisis, this figure is second only to the 44,000 jobs added in 4Q12.

As usual, services added the most to hiring, accounting for 56% of the new jobs created, while construction accounted for 32% and manufacturing for 10%. This represents strong growth in non- service-sector job creation, as manufacturing usually only accounts for 5% of job growth with services at 64%.

Low productivity is a problem that Singapore has grappled with for a long time and raising it is the main driving force behind the government’s restructuring plan and tighter immigration policies. However, productivity outside of manufacturing has remained weak, particularly in services.

Since services accounts for about 63% of GDP and 70% of total employment, raising productivity in this sector is crucial over the medium term.

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