THE chemical industry has been flagged out as a sector which may see retrenchments this year due to spiralling costs.
This is alarming because it is a high value-added sector of the economy, whereas retrenchments so far have tended to be in the lower value-added industries like low-cost manufacturing.
National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong, who spoke at a press conference on the outlook for the job market this year on Wednesday, warned that rising costs of rent and utilities may push chemical firms out of Singapore, adding to layoffs which have spiked in the past year.
Figures show that 2,898 workers from unionised companies lost their jobs last year, up from 1,647 workers in 2012. Most of the retrenched workers were employed by manufacturing firms which moved operations to lower-cost destinations like Malaysia, China and Vietnam.
Ms Cham noted that chemical companies too have shared with the labour movement that they are being squeezed by rising costs. Already, Japanese company ISK, which shut down in Singapore last year and retrenched 300 staff. She added: "They are not in the low-end business and they say their problem is not that the workers don't have the skills. The companies feel that operating in Singapore just costs too much."
While retrenchments are expected this year, Ms Cham said NTUC is confident that most workers will find new jobs given the tight labour market. She said workers can expect a 4 to 5 per cent annual wage increase this year as companies are looking harder at ways to retain staff.