Singapore posts highest manufacturing growth among major economies worldwide

And the country’s competitiveness got a big boost from the 18.3% drop in labour cost.

Singapore's manufacturing output per man hour last year made the biggest jump among 19 major economies in a study by the US Department of Labor.

At the same time, Singapore's competitiveness got a big boost from a sharp drop in its unit labour cost, which fell 18.3 per cent in Sing dollars and 12.8 per cent in US currency - among the largest falls in the study.

After dipping 0.3 per cent in 2009, Singapore's labour productivity in 2010 surged 32.7 per cent over the year before, according to the study done by the department's Bureau of Labor Statistics.

The next biggest increase was not even near that of Singapore's - 16.4 per cent, posted by Finland - though productivity increased in all 19 economies last year.

'In the majority of countries, labour productivity rose by more than five per cent,' the BLS says in its report. And only six economies saw productivity growth of over 10 per cent.

The productivity of two of Singapore's closest economic rivals which are in the study - Taiwan and South Korea - climbed 15.2 and 8.6 per cent respectively.

Productivity grew just 1.6 per cent in Australia in 2010, the lowest in the study, while it went up 13.9 per cent in Japan, 13.4 per cent in Sweden, 12.9 per cent in the Czech Republic and 9.6 per cent in Denmark. It increased 5.8 per cent in the US.

Productivity fell in 12 of 19 economies in 2009.

'The productivity increases in 2010 were driven by large gains in output coupled with modest changes in (working) hours,' the report says. 'Output, after having fallen in all countries in 2009, rose in all countries in 2010.'

Output jumped 29.7 per cent in Singapore, following a 4.2 per cent slip in the year before. Hours worked were down 2.3 per cent, smaller than the 3.9 per cent decline in 2009.

Manufacturing unit labour costs - the cost of labour input required to produce one unit of output - fell in 2010 in national currencies in all the 19 economies.

'Singapore, Sweden (minus 13.9 per cent) and Japan (minus 13.3 per cent) recorded the largest drops,' the report says.

The decline was even steeper in US dollar terms for most European economies, because of the relative strength of the US currency.

The ULC in US dollars fell 15.4 per cent from the year before in Finland, 14.7 per cent in Germany, 12.2 per cent in the Netherlands and 10.7 per cent in Denmark.

It fell 12.8 per cent in Singapore.

But while Singapore's ULC dropped last year, its real hourly compensation in manufacturing rose 5.5 per cent - the biggest jump in the study.