SINGAPORE - Some positive signs emerged in the labour market in the second quarter of this year, with unemployment and layoffs both lower than in the previous quarter. However, total employment continued to shrink.
Observers said the labour market is "not out of the woods" yet, as retrenchments are still high and weak job numbers may limit economic growth.
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 Manpower Ministry (MOM) on Friday (July 28) showed.
For Singaporeans and permanent residents combined, the rate was 3.1 per cent in June, down from 3.2 per cent in March. The overall rate remained unchanged at 2.2 per cent.
But the rates were still "elevated", said the ministry. 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 figure of 4,000 for the first quarter, and lower than the 4,800 layoffs in the second quarter of last year.
DBS economist Irvin Seah noted that while the latest data suggests the labour market is bottoming out, it is still too early to celebrate. If retrenchments continue at this level, the total number for the year will come in above 12,000, whereas a good number to see 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.
"(I) call out to employers to embrace digitalisation and technology but at the same time recognise the imperative to constantly focus on up-skilling, re-skilling and second-skilling all their employees," he said in a Facebook post on Friday, in which he also urged workers to be agile and adaptable to changes.
Total employment fell for the second straight quarter, with 8,400 fewer workers - not including foreign domestic workers -in jobs.
The ministry said the drop was mainly due to a decrease in work permit holders in the construction and marine sectors, because of low oil prices and continued weakness in construction activities.
The decline was smaller than the 9,400 figure from the first quarter, but a reversal from employment growth of 2,100 a year ago.
The manufacturing sector has been shedding workers for nearly three full years, as employment fell for the 11th consecutive quarter, by 2,500.
In construction, employment fell for the fourth consecutive quarter, by 9,500, while the services sector added 3,400 workers, excluding maids.
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 employment 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. So far the first half of this year has seen 17,800 fewer workers in jobs, excluding maids.
This weakness may put a dampener on economic growth, they said, adding: "Singapore may not be able to capitalize on the full extent of the current demand upswing, as firms face overly strict barriers to hiring."
MOM reiterated in a statement that the labour market outlook remains uneven across sectors.
"Hiring remains cautious in sectors such as construction and marine, but opportunities will continue to be available in finance and insurance, infocomms and media, healthcare, professional services and wholesale trade," it said.
The ministry highlighted these five sectors as having promising potential for job creation last week, when it announced that Second Manpower Minister Josephine Teo is heading efforts to help prepare Singaporeans for and match them to jobs in these sectors.
MOM advised individuals who need job help to approach any of the five career centres under Workforce Singapore and the Employment and Employability Institute.
Companies can tap on the Lean Enterprise Development Scheme to become less reliant on manpower and create good quality jobs.
Correction note: In an earlier version of the story, we listed total employment as 3,631,300. This figure is incorrect, as it was based only on the manufacturing, construction and services sectors and did not include other sectors such as agriculture, quarrying and utilities. The correct figure for total employment is 3,658,500. We are sorry for the error.