Oral reply to PQ on sectoral productivity growth and new measures of productivity

Question

Mr Saktiandi Supaat: To ask the Minister for Trade and Industry (a) what are the sectoral productivity growth rates, trends and outlook in Singapore since the onset of COVID-19; and (b) whether there are new measures of productivity needed to better measure the hybrid model of work productivity.

Oral Answer (to be attributed to Minister of State for Trade and Industry Alvin Tan)

1. Since the start of the COVID-19 pandemic, the productivity of various sectors of the economy has been uneven, reflecting in large part the differentiated impact of the pandemic.

2. In 2020, labour productivity, as measured by real value-added per actual hour worked, rose for outward-oriented sectors such as manufacturing, wholesale trade and finance & insurance. For example, the productivity of the manufacturing and wholesale trade sectors increased by 18.6% and 3.1%, respectively. By contrast, sectors which were severely disrupted by travel and domestic restrictions, such as construction, transportation & storage, accommodation and food & beverage services, experienced declines in productivity. In particular, the productivity of the transportation & storage and food & beverage services sectors fell by 22.1% and 17.7%, respectively.

3. For 2021, productivity growth is expected to remain positive for most outward-oriented sectors, given the pickup in global economic activity. Sectors that continue to be disrupted by weak travel demand and domestic restrictions such as transportation & storage and food & beverage services, are not likely to return to pre-COVID productivity levels, as activities in these sectors are not expected to recover fully this year.

4. Since 2015, the Ministry of Trade and Industry has compiled statistics on real value-added per actual hour worked, to complement statistics on real value-added per worker. Real value-added per actual hour worked is recognised internationally, including by the International Labour Organisation, to be the most appropriate measure of labour productivity as actual hours worked capture the intensity of labour input more accurately.

5. In the context of a hybrid model of working, real value-added per actual hour worked also provides a more accurate measure of labour productivity, as it accounts for the varying intensity of labour input by employees under different types of work arrangements. These include (i) flexi-time arrangements that grant employees flexible work schedules, depending on their work and personal commitments; (ii) flexi-load arrangements that involve employees who are hired on a part-time or project basis; as well as (iii) flexi-place arrangements that allow employees to telecommute and record hours worked in both workplace settings and at home.