- Analyst at Credit Suisse, Apr 2013Trend GDP growth is likely to be half that of previous decade.
Key implications of lower trend GDP growth:
1. A poorer growth-inflation trade-off: for a given level of real GDP growth, Sg is likely to have to endure higher inflation compared to the past.
2. More selective foreign direct investment inflows, given the restrictions on foreign labour and increasing land constraints.
3. Future price gains in the property sector could be more moderate.
4. Increasing constraints on fiscal revenue and, hence fiscal spending.
- TODAY, Feb 2014A persistently tight labour market continued to drive inflation in Sg last month, reflecting the pressure on firms to pass rising wage costs to consumers, particularly in serve-centric industries, such as hospitality, healthcare as well as food and beverage.
- SBR, Jun 2014Orchard Road has been suffering from so much ailments lately, and analysts are starting to hear t grunt from all the industry woes that has been bugging it.
According to Maybank Kim Eng, Singapore's labour crunch is to have a hard-hitting impact on hoteliers and retailers.
Labour shortage and manpower costs remain the overriding concerns for both hotels operators and retail landlords/tenants, which could significantly impact profit margins.
- BloombergView, Apr 2014Singapore also is a cautionary tale of the unintended consequences of stamping all those work visas. On the upper end of the wage spectrum, rich investment bankers and entrepreneurs drive property prices and living costs out-of-reach for the middle class, while lower-income workers depress wages.
- WSJ, Jan 2010By some estimates, a third or more of Singapore's 6.8% average annual growth from 2003 to 2008 come from the expansion of its labour force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations.
At the same time, though, foreigh workers have driven up real estate and other prices and made the city-state's roads and subways more congested. Their arrival has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore's gap between rich and poor.
Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, feel 7.8% in 2008 and 0.8% in 2007 - a phenomenon that could eventually translate into lower standards of living.
The numbers here are in recession years, but in the recent few years when most economies are recovering, Sg's productivity not only didn't grow, it was in negative territory.
- BT, Feb 2014Companies here may have to lay off workers to cope with cost pressures as they respond to what they say is a Budget that is more focused on the long term than addressing their immediate concerns.
While business leaders whom BT spoke to commended the government for doing more to encourage productivity and innovation, they felt that the absence of direct measures to help firms with costs and cash flow issues meant that they might need to try to do more with less by cutting headcount.
- BT, Mar 2014Companies are facing a "triple whammy" of rising rents and utility bills, growing wage costs, and a shortage of workers, said Mr Singh, himself a businessman. And this "chronic" cost issue does not affect SMEs alone. "The top management of some large MNCs here...have expressed their serious concerns about the unrelenting increases of the costs of doing business coupled with the unavailability of workers," he siad.
Iskandar's industrial parks are a "huge threat", he said. If Singapore's SMEs are forced to move to Johor, MNCs may follow their SME suppliers and subcontractors. "The exodus may be larger than we imagine...We rist hollowing out our economy in the future, and I would like to sound an alarm that we are close to the tipping point."
- ST, Sept 2014More firms are likely to shut down or downsize as foreign manpower curbs continue, said employers and economists.
This is because productivity has not grown fast enough to make up for the labour crunch.
The experts said the authorities tightened foreign worker hiring policies with the aim of forcing firms to work more efficiently.
But the reverse has happened in some companies.
Singapore Business Federation's chief operating officer Victor Tay said a lack of workers has pushed some firms to focus on day-to-day operations instead of planning ahead to raise productivity.
Tay suggested that the pace of foreign manpower curbs to be slowed down to allow firms to recover.
- ST, Mar 2014"We are just trying to do too many things too fast and this is hurting many companies," said Mr. Singh. Some multinational firms have said they might be forced to move out of Singapore, he said, and warned that the government consider the risk that he economy might be 'hollowed out'.
- Reuters, Oct 2014The quarter-on-quarter reading for second-quarter GDP was revised lower, to a contraction of 0.1 percent on an annualised basis, down from 0.1 percent growth previously.
"Wage inflation is likely to remain relatively firm, and businesses in food-related and some services sectors could further pass on cost increases," the Monetary Authority of Singapore said in its half-yearly statement.