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Trends in Productivity Growth as Measured by Real Value-Added (VA) Per Actual Hour Worked (AHW)

Trends in Productivity Growth as Measured by Real Value-Added (VA) Per Actual Hour Worked (AHW)

Internationally, labour productivity can be measured using real value-added (VA) per worker or real VA per hour worked. In Singapore, the more commonly used measure of productivity has been real VA per worker, as both VA and employment data are readily available on a quarterly and annual basis.

Since 2015, MTI has compiled statistics on real VA per actual hour worked (AHW) on an annual basis. This measure is recognised internationally, including by the International Labour Organisation, to be a better measure of labour productivity as AHW captures the intensity of labour input more accurately. Specifically, the measure accounts for changes in employment patterns, such as a rise in part-time work and cyclical changes in the number of hours worked by full-time employees. With these trends having been observed in Singapore in recent years, the measurement of labour input using AHW has become more pertinent in our context (Goh & Lin, 2015).

Previously, AHW statistics were estimated by MTI using data on usual hours worked (UHW) and paid hours worked (PHW) collected by the Ministry of Manpower (MOM), with further adjustments to account for public holidays, annual and sick leave. As UHW data is only available annually, real VA per AHW was thus published on an annual basis.

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