Singapore outperforms other first world countries in terms of productivity growth

But manufacturing conditions will continue to falter.

Singapore’s productivity drive has fallen short of official target, but the city-state’s productivity growth has still comfortably outpaced other high-income economies in the last 15 years.

According to a report by ICAEW, Singapore’s growth output per worker has risen by 1.5pp per annum over this period. This significantly outstrips other high-income economies: 0.3pp faster than the US, 0.9pp faster than the UK, and 1pp faster than the Eurozone.

“Though Singapore is already a matured and urbanised economy with little scope for sectoral shifts to increase productivity, it has done remarkably well – comfortably outperforming other high-income economies in terms of percentage growth,” said Priyanka Kishore, ICAEW Economic Advisor & Oxford Economics Lead Asia Economist.

The report added that high household savings are also likely to have contributed to productivity improvements as a stable supply of finance is needed to invest in both physical and human capital.

However, the local economy will continue to struggle in the near term as it has been hit hard by the prolonged downturn in global trade and competition with other emerging economies.

“We anticipate that output per worker growth should register around 1.5-2% per annum in the coming years, a relatively impressive performance by the standards of other economies with similar levels of GDP per head,” Kishore said.