SINGAPORE — Labour productivity in the second quarter fell for the first time in a year, hurt by declines in sectors such as construction and business services as well as accommodation and food services, the Ministry of Trade and Industry (MTI) said yesterday.

But the 1.3 per cent on-year decline is only temporary and does not indicate a structural setback for the nation’s productivity push, said Ms Ow Foong Pheng, the ministry’s Permanent Secretary.

“The economic restructuring towards higher productivity is a long-term effort and figures would fluctuate from quarter to quarter,” she said. “Going forward, how productivity pans out will depend on gross domestic product growth and external conditions … But more importantly, we need to look at what’s happening sector by sector.”

In a report MTI released together with its second-quarter economic survey, domestically-oriented sectors — such as construction, retail and food services — saw annualised productivity decline 0.3 per cent between 2010 and last year, far worse than the 2.1 per cent gain recorded by export-oriented sectors.

Between April and June, productivity in the construction sector dipped 2 per cent, while accommodation and food services dropped 3.2 per cent. Manufacturing along with finance and insurance were the only two sectors to report gains, at 1.1 per cent and 1.6 per cent, respectively.

“Many domestically-oriented sectors are struggling with the tightening manpower supply, with some companies facing problems moving up the value-chain,” the report said. “Excluding these sectors, productivity for the overall economy would have grown by 1.3 per cent per annum, instead of 0.2 per cent per annum.”

The latest figures came after Trade and Industry Minister Lim Hng Kiang said in Parliament last week that the restructuring process is far from over even though more companies are tapping the Government’s productivity schemes. “Clearly, more needs to be done. Economic restructuring is a long-term effort. We must continue to press on with our restructuring drive,” he said.

Meanwhile, it is still too early to call Singapore’s push for a 2 to 3 per cent annual productivity growth by 2020 a lost cause, Barclays senior economist Leong Wai Ho said.

“The process cannot be assessed on a quarterly basis — the only reliable way to read it is to take a three-year moving average, and the long-term gains have been resilient, bearing in mind we’ve had significant increase in employment over the period,” he said. “We shouldn’t be itching to conclude that the productivity push has hit a setback.”