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More tools to measure productivity growth soon (Amended)
INCREASINGLY, the government is coming up with more indicators to better measure productivity growth in the different sectors.
Senior Minister of State for Trade and Industry Lee Yi Shyan on Monday said in parliament that the Ministry of Trade and Industry is working with various trade associations and industry bodies to roll out productivity improvement plans that are tailored to the needs of the individual sectors.
This, as sectors including food and beverage (F&B), retail and construction face rising cost pressures, particularly against the backdrop of a labour crunch.
Mr Lee made this point in his response to MP Foo Mee Har's question on whether the government needs to implement "finer measurements of productivity", given that topline numbers do not seem to reflect the progress made since Singapore's economic restructuring efforts began in 2010.
Citing the example of the construction sector, Mr Lee said that productivity growth is measured in terms of value-add per worker, but it does not reflect productivity growth.
Instead, another measurement - square metre constructed per man day - indicated that the sector has made progress over the last three years. "If this increase is not reflected in the prices of their contracts, then the net effect may be a reduction in productivity."
Another example raised was the retail sector, where specific indicators of productivity growth include sales per square foot of retail space and the turn of inventory.
Mr Lee said Singapore's long-term target for gross domestic product growth is between 3 and 5 per cent, while the target productivity growth is between one and 3 per cent.
Given the macroeconomic conditions, he said that the most realistic productivity growth target for this decade is between 2 and 3 per cent.
The earlier version of this article stated, based on the speech made in parliament, that realistic productivity growth target for this decade is between 2 and 4 per cent. The Ministry for Trade and Industry has since clarified this to be 2 to 3 per cent. The article above has been revised to reflect this.