Retrenchments down after three quarters of increases, unemployment rates remain low: MOM

SINGAPORE: The labour market in Singapore remained stable in the second quarter of 2023, with retrenchments declining following three consecutive quarters of increases, the Ministry of Manpower (MOM) said on Thursday (Jul 27).

"Total employment continued to expand though at a slower pace, and unemployment rates remained unchanged," the ministry said in its Labour Market Advance Release for the quarter.

A total of 3,200 people were retrenched, down from the 3,820 who lost their jobs in the first quarter of the year, with business reorganisation and restructuring continuing to be a top reason for layoffs.

That number is around the non-recessionary pre-pandemic range seen in 2019, MOM said.

"Retrenchments continued to be driven by services and most were in IT services and wholesale trade," the ministry said.

"There was a substantial decline in the number of retrenchments in manufacturing, following the larger-scale retrenchments that occurred in previous quarters.

"The number of retrenchments in other remaining sectors has declined or were broadly stable."

MODERATION IN GROWTH

Total employment excluding migrant domestic workers expanded for the seventh consecutive quarter, although growth had "moderated significantly" compared to the preceding quarter, MOM said.

The number of jobs grew by 23,700 in the second quarter, lower than the increase of 33,000 seen in the first quarter.

MOM said that total employment growth in the second quarter "came solely from non-residents, although this has also eased from past quarters, with a broad-based slowdown in non-resident growth across sectors".

Non-resident employment growth was mainly in construction, amid "sustained demand for both public and private sector projects, such as housing", the ministry said.

Resident employment change, meanwhile, contracted for the first time since the second quarter of 2020.

Seasonal declines were observed in food and beverage (F&B) services and retail trade, MOM said.

"Resident employment grew in other sectors, mainly in community, social and personal services, financial services and professional services, although growth has moderated."

The ministry said that the declines in F&B and retail during this period were "not unusual".

"F&B and retail outlets usually increase their hiring of temporary staff in the fourth quarter to cater for year-end festivities, and reduce their number of staff in subsequent quarters, as consumer demand eases," MOM said.

The resident employment level is, however, still above its pre-pandemic level in 2019, it added.

Unemployment rates remained low, although they rose slightly in April and May before remaining unchanged between May and June.

Preliminary figures showed that the unemployment rates in June were 2.8 per cent for citizens, 2.7 per cent for residents and 1.9 per cent overall.

"Over the quarter, the number of unemployed residents rose from 62,200 in March 2023 to 64,600 in June 2023," MOM said.

LOOKING AHEAD

Concluding its advance release, MOM cautioned that labour market conditions could "soften" in the quarters ahead.

"The slowdown in total employment growth reflects the impact of global economic headwinds," the ministry said.

"Firms are also adopting a more cautious stance towards hiring and wage increases due to the global economic slowdown and high inflationary environment.

"In the near term, employment growth could ease further."

MOM said that the proportion of firms which indicated an intention to hire in the next three months had declined notably from 64.8 per cent to 58.2 percent.

The proportion of firms intending to raise wages also fell significantly from 38.2 per cent to 28 per cent, the ministry added.