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About 1% productivity growth likely this year
[SINGAPORE] Overall productivity growth for this year is expected at about one per cent, said Trade and Industry Minister Lim Hng Kiang in parliament yesterday.
He was responding to queries from Jurong GRC Member of Parliament David Ong, who noted that the Republic had fallen short of the productivity growth target of 2-3 per cent in the last few years.
Productivity growth for the first quarter was 0.9 per cent; the government will announce productivity growth data for the second quarter when it releases its latest Quarterly Economic Survey report on Tuesday next week.
In his update on the progress made in efforts to restructure the economy, Mr Lim told the House that labour productivity had grown by 2.9 per cent a year from 2009 till last year, putting it within the productivity growth target of 2-3 per cent per annum until 2020, as laid down by the National Productivity and Continuing Education Council (NPCEC).
Mr Lim pointed out, however, that the aggregate figure masked some cyclical fluctuations: The high productivity gains in 2010, for instance, came from a strong recovery from the economic downturn in the previous year.
Recent productivity growth, however, has been weak, with labour productivity growing by only 0.2 per cent per annum from 2010 till last year.
This was due mainly to sectors such as retail, food and beverages and construction, where productivity dipped over the period.
But there have been some bright spots of sustained good productivity growth too; the transport engineering and precision engineering clusters recorded productivity growth between 2010 and last year, he said. On the whole, he said, the mindset of businesses towards restructuring has shifted; many now accept the need to restructure and have drawn on government schemes designed to help them raise their productivity.
More than 17,000 companies - 7,000 last year alone - have benefited from the various productivity initiatives under the NPCEC.
Mr Lim said that while the take-up rates for the Productivity and Innovation Credit and the Innovation and Capability Voucher schemes are going up, more should be done.
"We have tried our best to encourage our companies, in particular, the small and medium-sized enterprises and micro-enterprises, to take up the available schemes. We are approaching them through all channels, such as the chambers and trade associations."
Mr Lim stressed that economic restructuring was a long-term effort and that Singapore must press on with it. He expressed confidence that the Singapore economy would be able to restructure over time to emerge more productivity-driven. This would ensure a more efficient use of labour, which will relieve labour constraints and support higher real wages without eroding the economy's competitiveness, he said.
Turning to Singapore's GDP (gross domestic product) growth for this year, he said that the government was confident of meeting the 2-4 per cent growth target, barring downside risks in the global macroeconomic environment and an escalation of geopolitical risks.