Productivity output in construction, manufacturing, services sectors dipped 3.5%

But here's a warning from experts.

According to ICAEW report, Singapore’s output per hour worked declined 3.5% year-on-year in Q4 2012 across the construction, manufacturing and services sectors. 

However, it cautions that the statistics can be volatile in the short term and the downturn could reflect the business cycle rather than fundamental overall changes.

ICAEW Economic Advisor and Cebr’s Head of Macroeconomics, Charles Davis, said: “Singapore’s long-term prosperity depends on raising productivity levels and raising real wages right across the population.

However, this slowdown should not be seen dooming Singapore to decline; productivity levels should be seen as a outcome, not a determinant. For example, the sharp fall in manufacturing was down to the financial crisis and the subsequent recovery boosted the figures. If Singapore grows its high-value productive sectors – like finance and ICT– overall productivity will increase.

Unemployment remains low, domestic demand is rising, and if the global economy picks up speed towards the end of the year as expected, Singapore’s status as a trading hub means it should reap the benefit.”

“However, it will be important to focus on structural change to raise productivity. Singapore will need to adjust as it moves away from over-dependence on cheap foreign labour.”