SINGAPORE’S labour productivity has grown 2.4 per cent annually since the roll-out of Industry Transformation Maps (ITM) began, driving wage growth in those sectors, according to the latest Singapore Public Sector Outcomes Review on Friday (Nov 1).
This was among the achievements highlighted in the Ministry of Finance (MOF) report, released every two years to take stock of national outcomes ranging from the economy to education, housing and transport.
Labour productivity – measured by real value-add per worker – achieved such growth from 2016 to 2023 despite the economic shocks from the Covid-19 pandemic, said the report. This led to annual growth of 1.9 per cent in real median gross monthly income of full-time employed residents in the 23 ITM sectors.
Progressively rolled out from 2016, ITMs are industry-specific frameworks with blueprints for reform and strategies for digitalisation.
From 2005 to 2015, labour productivity had a compound annual growth rate of just 0.5 per cent, said past Ministry of Trade and Industry reports.
But performance for 2016 to 2023 was uneven across sectors. Labour productivity grew 3.1 per cent per annum in outward-oriented sectors, but fell 0.3 per cent in domestically oriented ones.
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The report said that the latter’s weakness was partly due to “operational disruptions during the pandemic, and generally manpower-intensive job roles with limited automation potential in the near term”.
Nevertheless, real income rose 2.3 per cent per annum in the domestic-facing sectors – higher than the 1.6 per cent rate in outward-oriented sectors.
In 2023, the government supported 18,000 companies in growing their revenue and improve cost-competitiveness. Of these, 3,000 took on transformative projects that were expected to result in a S$16.4 billion boost to annual revenues, and create 21,500 skilled jobs.
Singapore’s economy grew at an annualised rate of 2.6 per cent from 2019 to 2023, rebounding strongly after its worst post-independence recession during the pandemic in 2020. Despite the headwinds, value added for both the manufacturing and modern services clusters rose by about 20 per cent in this period.
Singapore remained a choice location for new investments, said the report.
The Republic’s stock of foreign direct investment (FDI) grew 36.4 per cent to S$2.6 trillion in 2022, up from S$1.9 trillion in 2019.
Singapore’s FDI inflows in 2022 were the third-largest globally – after the US and China – and the second-largest in Asia after China, the report noted.
Narrowing gap
From 2018 to 2023, the wage gap narrowed. Real incomes – including Central Provident Fund (CPF) contributions – grew faster for lower-wage workers, rising 1.1 per cent per annum at the 20th percentile, compared with 0.5 per cent per annum at the median.
The report attributed this to initiatives such as the Progressive Wage Model and a hike in the Local Qualifying Salary, which is the minimum that locals must be paid if their employers want to hire foreigners.
However, when real incomes fell from 2022 to 2023, lower-wage workers were hit harder. Incomes declined 3 per cent at the 20th percentile and 2.2 per cent at the median.
Yet income inequality – measured by the Gini coefficient – fell to a low of 0.371 in 2023 after accounting for taxes and transfers. This was the lowest since 2020.
Nominal wages for full-time residents generally rose over the last five years. Median gross monthly income including CPF was S$5,197 in 2023, up from with S$4,563 in 2019.
The employment rate of residents aged 25 to 64 remained high at 82.6 per cent in 2023, exceeding the pre-Covid level of 80.8 per cent in 2019.
Last year, 47.3 per cent of job openings were newly created positions that arose mainly from business expansion. Of these, 56.3 per cent were for professional, managerial, executive and technical (PMET) positions. The share of employed residents in PMET jobs rose to 62.6 per cent in 2023, from 58.4 per cent in 2019.
From education to scams
The review also covered other areas such as education, health, retirement adequacy, housing and security – including scams.
In education, for instance, the labour force’s training participation rate rose from 35 per cent in 2015, when the national SkillsFuture movement was launched, to close to 44 per cent in 2023.
In fighting scams, the authorities averted about S$150 million in potential losses last year through automated sending of SMS alerts to scam victims. They also helped to recover more than S$100 million in lost monies, and took down 19 transnational scam syndicates by working with overseas law enforcement agencies.
Losses suffered by scam victims fell a marginal 1.3 per cent to S$651.8 million in 2023, from S$660.7 million in 2022.
However, they have risen 24.6 per cent in the first half of 2024 from the corresponding period in 2023.
