SINGAPORE - Singapore's labour market - which has been mired in the doldrums - is showing signs of turning the corner amid a rosier economic outlook, the Monetary Authority of Singapore (MAS) said.
Retrenchments are down and more companies are hiring - though the recovery is expected to be gradual, the central bank noted in its latest macroeconomic review out on Friday (Oct 27).
The job market has been weighed down mainly by the prolonged downturn in the marine and offshore engineering cluster, which has been hit by low oil prices, as well as the weak construction sector.
The MAS noted in its review 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 economic growth of 2 to 3 per cent this year. The final figure is expected to come in at the upper half of this range, before moderating slightly in 2018, the 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, the 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.
Weighed down by the prolonged downturn in the marine and offshore engineering cluster, employment in the transport equipment industry declined by 8,000 workers in the first six months of 2017.
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.
Cumulatively, employment in the transport equipment and construction sectors have each declined by around 30,000 workers from their recent peaks in 2013 and 2016, respectively.
Still, the overall outlook for the job market is brightening, the MAS said.
Labour demand is expected to rise gradually in the near term, supported by hiring in the modern services and community, social and personal (CSP) services, as well as for the year-end festivities.
Still, this will be a gradual pick-up and the unemployment rate will likely remain close to its current level in the near term, added the central bank.