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Now, Singapore’s labour market under the strain as economy struggles

Bloomberg Singapore | Updated on October 29, 2019 Published on October 29, 2019

File photo   -  Reuters

There are signs that the employment outlook may continue to deteriorate

Singapore’s resilient labour market is starting to come under the strain as the trade-reliant economy struggles in the face of global pressures.

Retrenchments are on the rise and companies have become more cautious about raising wages. It has also become difficult for many people to find new work after they have lost their jobs. While the central bank is optimistic of some recovery in the upcoming quarters, there are signs that the employment outlook may continue to deteriorate.

Analysts are closely watching Singapore’s net employment data, job vacancies, average monthly earnings, and unemployment rates. Here is a look at what the labour-market gauges tell us about the outlook:

Net Employment Outlook

Among 669 hiring managers in Singapore, the attitudes toward the employment outlook in the final three months of the year have been their most pessimistic since the third quarter of 2017, according to the recent ManpowerGroup survey. The survey was released in September.

The difference between those saying staff numbers will increase in the fourth quarter versus those predicting a decrease is a slim 5 percentage points, the data show. Respondents in the manufacturer sector, which has been especially hard hit by the United States (US)-China trade war, expect the weakest performance in a decade, according to Lee Ju Ye, an economist at Maybank Kim Eng Research Pte Ltd.

Job Vacancies

Selena Ling, head of treasury research and strategy at Oversea-Chinese Banking Corp in Singapore, has her eyes on the job vacancy-to-unemployed ratio. DBS Group Holdings Ltd’s Irvin Seah and Maybanks Lee also closely track this gauge.

The measure slipped below 1 in the second quarter for the first time since the end of 2017, showing that the city state’s jobless outnumbered open roles.

The job vacancy-to-unemployed person ratio is key to me and it has dipped below parity, suggesting a softening in the labor market, said Seah.

Average Monthly Earnings

Paychecks also have been feeling the pinch, at least through the first half of this year. The average monthly earnings rose 2.1 per cent in the three months through June, the slowest pace since the start of 2017.

Unemployment Rates

Two unemployment rates tracked in Singapore -- one for citizens, and the other for citizens and permanent residents -- have been on the rise for the past few quarters. While still below their post-recession peaks, neither measure has seen a quarterly decline in almost two years and each has been worsening of late.

Retrenchments

Retrenchments climbed to 2,900 in the third quarter, after easing in the previous three months, according to advanced quarterly data released last week. The biggest losses were in the services industries, although manufacturing and construction also saw job cuts.

The Ministry of Manpower will provide more detailed information about retrenchments in an upcoming report, including whether terminations among professionals, managers, executives, and technicians -- or PMETs -- rose again in the quarter.

Re-Entry Duration

The government tallies the share of retrenched, who return to employment within six months, for any given quarter. That re-entry rate has dropped sharply to 59.9 per cent as of the second quarter, with those with diploma and professional qualifications declining to 57.7 per cent from 70.9 per cent in the first quarter.

Published on October 29, 2019
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