The local job market is showing signs of finally breaking out of the doldrums amid a rosier economic outlook, the Monetary Authority of Singapore (MAS) said.
Retrenchments are down and more companies are hiring, although the recovery is expected to be gradual, the central bank noted in its latest macroeconomic review out yesterday.
The labour market has been weighed down mainly by the prolonged downturn in the marine and offshore engineering cluster caused by low oil prices, as well as the weak construction sector.
MAS noted that Singapore's economic recovery is gathering pace thanks to a lift from trade-related segments, with signs that growth is broadening out to benefit more industries.
Official forecasts tip growth of 2 per cent to 3 per cent this year. The final figure is expected to come in at the upper half of this range, before moderating slightly next year, MAS said.
In line with this cheerier forecast, the labour market is also showing signs of improvement.
Overall retrenchments moderated to 7,640 in the first half of this year from 9,660 in the preceding six months, while the overall job vacancy rate edged up over the same period for the first time since the first half of 2014.
The increase in job vacancies has been corroborated by recent surveys, which indicate that a larger share of employers are now looking to hire, MAS noted. Excluding the construction and transport equipment manufacturing industries, overall job creation in the first half of this year was comparable to the same period a year earlier.
But the poorest-performing sectors have been hard-hit.
The prolonged downturn in the marine and offshore engineering cluster wiped out 8,000 jobs in the transport equipment industry in the first six months of this year.
At the same time, net employment in the construction sector contracted by 23,100 amid continued weakness in private sector building, as well as the completion of several major projects, including the Downtown Line 3 and Changi Airport Terminal 4.
Employment in the transport equipment sector has declined by around 30,000 workers from a recent peak in 2013, while the construction industry has shed the same number of jobs since its 2016 peak.
But the overall outlook for the job market is brightening, MAS said.
Labour demand is expected to rise gradually, supported by hiring in the modern services and community, social and personal services, as well as for the year-end festivities.
Still, this will be a gradual pickup and the unemployment rate will likely remain close to its current level in the near term, added the central bank.
Preliminary data released by the Ministry of Manpower yesterday showed that the unemployment rate was 2.1 per cent last month after accounting for seasonal variations, down slightly from 2.2 per cent in June.