Labour productivity drops 2.5% in the second quarter

And Singapore has the sharp slowdown in GDP growth to blame.

The Ministry of Manpower said, “Labour productivity slipped by 2.5% over the year in the second quarter, after increasing by 5.4% in the first quarter this year. This was due to the sharp slowdown in GDP growth from a high base in the second quarter last year.”

Meanwhile nominal average monthly earnings increased by 6% in the second quarter of 2011 compared to the same period last year. According to the Ministry of Manpower, this was lower than the growth of 8.5% in the preceding quarter but similar to the 5.8% recorded in the second quarter of 2010. “Weighed down by inflation, real average monthly earnings rose by 1.3%, lower than the growth of 3.2% in the first quarter of 2011 and 2.6% in the second quarter of 2010,” reported the Ministry.

The unit labour cost, on the other hand, rose over the year by 10% in the second quarter, compared with more moderate increases of 1.8% to 3.5% in the preceding three quarters. This reflected the decline in labour productivity and rising labour costs arising from the tight labour market.