SINGAPORE - Overall job prospects may be improving, but a small - though growing - group of residents is being left in the lurch.

These job-seekers are finding it hard to find new positions even after being unemployed for 25 weeks or more, the latest labour report released on Wednesday (Dec 13) showed.

Observers said that ongoing restructuring continues to pose a challenge, as flagged in the labour report for the third quarter of 2017, even though the cyclical recovery in the economy has lifted job prospects.

DBS economist Irvin Seah said that the upward trend in the long-term unemployment rate for Singaporean and permanent residents in the past two years is a matter of concern.

It rose to 0.8 per cent in September, up from 0.7 per cent in June, according to figures released on Wednesday (Dec 13) by the Ministry of Manpower (MOM). This was similar to the figure in September last year. In contrast, the rate hovered between 0.5 to 0.6 per cent in 2014 and 2015.

This rate measures the proportion of the resident labour force that has been unemployed for at least 25 weeks.

"It reflects how workers in industries that have been impacted by disruptive technology are finding it harder to migrate to new industries, and highlights the need to upgrade the skill sets of workers, particularly for those who are older," he said.

MOM said that local employment is expected to continue to grow next year, in line with the Ministry of Trade and Industry's 2018 GDP growth forecast of 1.5 per cent to 3.5 per cent. But it will remain uneven across sectors.

"Job-skills mismatch will continue to be a growing challenge due to on-going economic restructuring and shifts in composition of the resident labour force," said MOM.

Overall, the unemployment rate in September remained at 2.2 per cent after accounting for seasonal variations.

The unemployment rate for Singaporeans was 3.2 per cent in September, down from 3.3 per cent in June and 3.5 per cent in March.

For residents - Singapore citizens and permanent residents combined - the rate remained unchanged from the previous quarter at 3.1 per cent.

Retrenchments in the third quarter - from July to September - dropped to 3,400, down from 3,640 in the second quarter of this year. This was lower than the 4,220 layoffs in the same quarter a year ago, and lower than preliminary data that the ministry released in late October, which placed the number of retrenchments at 3,600 in September.

However, total employment in the first three quarters of the year contracted by 21,400, excluding foreign domestic workers. The bulk of those who left were work permit holders from in construction and manufacturing, said MOM.

Total employment (excluding foreign domestic workers) sat at 3,412,000 as of September, a drop from 3,432,000 in September last year (2016).

Meanwhile, 66.4 per cent of residents who were retrenched in the first quarter of this year were back in jobs in the third quarter. This was up from 64.5 per cent who re-entered the workforce within six months a quarter earlier, and the highest rate since the fourth quarter of 2015.

Older workers aged 50 and above, and professionals, managers, executives and technicians (PMETS) continued to fare less well, with re-entry rates of 55.9 per cent for the former and 63.6 per cent for the latter. Nevertheless, the rates improved from the previous quarter.

Job seekers continued to outnumber job vacancies, and there were 87 job openings for every 100 unemployed people as of September. This seasonally adjusted ratio improved from the one in June, which saw 85 openings to 100 unemployed people.

Recruitment company Kelly Services Singapore's managing director Foo See Yang said that contracting is likely to remain as an alternative to permanent hiring, as businesses continue to adapt to the restructuring economy.

"Hiring activity is likely to gather pace in the first half of 2018, especially within the temporary and contract space for healthcare and information technology industries," he added.

Correction note: In an earlier version of the article, we mistakenly said that total employment sat at 3,412,000 as of September, a drop from 3,670,700 in September last year. The article has been updated with the correct data. We are sorry for the error.