Good news in labour market as unemployment rate falls
Positive signs emerged in the labour market in the second quarter of this year, with unemployment and layoffs lower than in the previous quarter.
But total employment fell for the second quarter in a row, and observers said the weak job numbers may limit economic growth.
Retrenchments are still high, which shows the labour market "is not out of the woods" yet.
The seasonally adjusted unemployment rate for Singaporeans was 3.3 per cent in June, down from 3.5 per cent in March, preliminary estimates released by the Ministry of Manpower (MOM) yesterday showed.
For Singaporeans and permanent residents, the rate was 3.1 per cent in June, down from 3.2 per cent in March.
There were 69,800 residents, including 62,800 Singaporeans, unemployed in June. This is down from 74,400 and 67,100 in March.
The overall unemployment rate remained at 2.2 per cent.
But the rates were still "elevated", said the ministry in a statement. They are 0.1 to 0.2 percentage points higher than a year ago.
Fewer workers were retrenched between April and June this year than in the previous quarter, with 3,500 layoffs - mostly from the services and manufacturing sectors.
This was lower than the 4,000 for the first quarter, and lower than the 4,800 layoffs in the second quarter of last year.
DBS Bank economist Irvin Seah said "it is premature to pop the champagne". If retrenchments continue at this level, the total for the year will come in above 12,000, whereas a good number would be about 10,000 or below, he said.
Labour MP and National Trades Union Congress assistant secretary-general Patrick Tay said pockets of layoffs are expected due to disruption, reorganisation and consolidation of businesses.
In a Facebook post yesterday, he called on employers to embrace digitalisation and technology, and also recognise the need to focus on equipping all their employees with more skills. He also urged workers to be agile and adaptable.
Total employment fell for the second straight quarter, with 8,400 fewer workers, not including foreign domestic workers, in jobs.
MOM said the drop was mainly due to a decrease in work permit holders in the marine and construction sectors, because of low oil prices and construction activity.
The manufacturing sector saw employment fall for the 11th straight quarter, by 2,500.
In construction, employment fell for the fourth straight quarter by 9,500, while the services sector added 3,400 workers, excluding maids.
The overall decline was smaller than the 9,400 figure from the first quarter, but a reversal from employment growth of 2,100 a year ago.
In all, 3,658,500 workers were employed here as of June. Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye said the figures so far are falling well short of the ministry's projected annual employment growth of 25,000 to 40,000 over the next few years.
The first half of the year has seen 17,800 fewer workers in jobs, excluding maids.
This weakness may put a dampener on economic growth, they said: "Singapore may not be able to capitalise on the full extent of the current demand upswing, as firms face overly strict barriers to hiring."
Still, recruiters said they are seeing growing demand for skilled workers in the services sector.
Mr Anthony Thompson, a regional managing director at Michael Page, said this is especially so for technology jobs, as organisations try to digitise more processes.
MOM reiterated that the labour market outlook remains uneven across sectors.
While hiring remains cautious in sectors such as marine and construction, MOM said there are opportunities available in finance and insurance, infocomm and media, healthcare, professional services and wholesale trade.