Singapore’s unemployment and retrenchment rates have declined in the first quarter of 2018 but expect ‘uneven labour demand’: MOM

Business restructuring and reorganisation continued to the main reason for retrenchment.
The Straits Times

Against the backdrop of sustained economic expansion, Singapore’s labour market has enjoyed slight improvement in the first quarter (1Q) of 2018, with lower resident unemployment and long-term unemployment rates recorded in March 2018, according to the Ministry of Manpower’s (MOM) Labour Market Report, First Quarter 2018.

Overall seasonally adjusted unemployment rate fell from 2.1% in December 2017 to 2% in March 2018. During the same period, resident unemployment dropped from 3% to 2.8% whereas unemployment among citizens remained at 3%.

According to MOM, the decline in resident unemployment rate was due to those aged 30 and over, and those who hold post-secondary and degree qualifications.

Meanwhile, seasonally adjusted resident long-term unemployment rate also saw a decline, from 0.8% in December 2017 to 0.7% in March 2018. The largest decline was observed among residents aged below 30 (from 0.9% to 0.6%) and those with post-secondary qualifications (from 0.9% to 0.5%).

Excluding foreign domestic workers, total employment in 1Q 2018 grew by 400, which MOM considers a turnabout from the decline in 1Q 2017 (-9,400).

Employment growth in community, social & personal services, financial services & insurance services, information & communications, transportation & storage and professional services was shown to have more than balanced out the decline in work permit holders in the construction and marine shipyard sector.

MOM also registered a significant plunge in retrenchments from 3,680 in 4Q 2017 to 2,320 in 1Q 2018 – the lowest since 1Q 2013 (2,120) – and was observed mainly in the manufacturing, construction and services sectors.

Business restructuring and reorganisation remained the primary reason for retrenchment, said MOM.

Six-month re-entry rate into employment of retrenched residents decreased slightly quarter-on-quarter from 63% to 61% and was more notable among professional, managers, executives & technicians (PMETs), individuals with diploma and post-secondary qualifications as well as those aged 30 to 39.

On the contrary, the re-entry rate increased among those below 30 and 50 & over, and those who possess secondary and below qualifications

For the first time in two years, the combination of more job vacancies and fewer unemployed persons resulted in the improvement of the seasonally-adjusted job vacancies to unemployment ratio from 0.92 in December 2017 to 1.04 in March 2018.

“In 2018, overall labour demand is expected to expand, but unevenly across sectors,” said MOM.

Although job opportunities will be available in the finance & insurance, infocomms & media, healthcare, professional services, logistics and wholesale trade sectors, the Ministry warned that hiring is expected to remain cautious in the construction and marine shipyard sector.

It added that in spite of the resident unemployment rate having declined to its lowest level since March 2016, further improvements would be more challenging to attain.

The Ministry pointed out the need for workers and businesses to be “agile and responsive” to economic restructuring and the evolving employment landscape in order to sustain low unemployment.