Why analysts think that Singapore's productivity measure may not be very effective

Actual productivity is different.

According to DBS, the productivity measure adopted by Singapore is probably not a good indicator of how productive workers actually are.

In Singapore, as in other countries, productivity growth is defined by the difference between GDP growth and labour/employment growth. 

Here's more from DBS:

But measured productivity can be very different from actual productivity – i.e., how efficient the workforce is – because Singapore is a small ship in a big sea. GDP jumps around a lot, especially in short-term, for reasons that have nothing to do with Singapore or the efficiency of its workforce.

Historically, measured productivity growth has been more correlated to GDP growth than employment growth. And graphically, except for the period between 2005-08, when employment accelerated, measured productivity growth usually moves in tandem with GDP growth.

Hence, the measured productivity that is widely quoted in Singapore is not a good gauge of the success of the restructuring effort, especially in the short-term.

Granted the counter-argument is that if workers are more efficient, GDP growth should be faster. In the medium-term, this is so. But in the shorterterm, Singapore’s GDP growth performance is determined by global outlook.

Not surprisingly, GDP growth and measured productivity growth are highly linked to global economic cycles rather than to true underlying efficiency of the workforce.