Chart of the Day: Manufacturing segment's productivity growth is getting worse

And it won't reverse anytime soon.

According to Nomura, domestic cost pressures are likely to remain elevated with tight labor markets. Unit labor costs have risen consistently in the last few quarters, in part due to productivity growth remaining negative. 

Three years into the economic restructuring, labor productivity has weakened further in H1 2013, and this is not confined to the construction sector.

Here's more from Nomura:

Manufacturing and several services sub-segments have all seen a worsening in productivity growth. Some areas are showing an improvement in productivity but for the economy as a whole this overall decline could take some time to reverse. 

Against this backdrop, the MAS‟s policy orientation is still to complement the economic restructuring, which entails the MAS allowing the associated domestic cost pressures to show in underlying inflation during this transition period, and not to focus too much on growth, which is already becoming more positive in any case.

This further supports the case for no change in the current policy stance.