Singapore has been reporting more cheerful economic growth numbers this year, but this pick-up is not translating into a stronger labour market.
Economists and government officials say the employment outlook is expected to remain lacklustre as growth is still uneven across sectors.
The Ministry of Trade and Industry (MTI) yesterday narrowed upwards its forecast for economic growth this year to 2 per cent to 3 per cent, from an earlier estimate of 1 per cent to 3 per cent.
It announced this alongside the release of the latest Economic Survey of Singapore, which showed the economy expanded 2.9 per cent in the April to June quarter compared with the same period a year earlier. This was faster than the 2.5 per cent growth in the preceding quarter and also an upward revision from an earlier estimate of 2.5 per cent.
In contrast to these stronger figures, the labour market has been faring less well.
Total employment fell for the second quarter in a row in the April to June period, with 8,400 fewer workers - not including foreign domestic workers - in jobs, according to Ministry of Manpower (MOM) data out last month.
The overall unemployment rate remained at 2.2 per cent, unchanged from the first quarter. But the rates were still elevated, the ministry said, being 0.1 to 0.2 percentage point higher than a year ago.
The manufacturing sector saw employment fall for the 11th consecutive quarter, by 2,500. In construction, employment fell for the fourth straight quarter by 9,500, while the service sector added 3,400 workers, excluding maids.
In a research report released last month, Bank of America Merrill Lynch economist Mohamed Faiz Nagutha said Singapore's labour market has remained weak "for the simple reason that the recovery has not been strong or broad enough".
This "jobless recovery" is chiefly due to the manufacturing sector, which has shed workers for 11 straight quarters, even though strengthening demand for Singapore's exports has helped boost factory output growth.
Growth in manufacturing has been driven largely by electronics and precision engineering, but the marine and offshore segment remains weak due to low oil prices and has been the main reason behind job losses in the sector, Mr Terence Ho, divisional director for manpower planning and policy at MOM, said yesterday at a press conference about the latest quarterly economic numbers.
MTI economics division director Yong Yik Wei added that the construction sector - which has been shrinking on the back of weak private sector building - has also contributed to employment declines.
MOM's Mr Ho said the employment outlook - in particular for manufacturing - will likely remain "modest" this year in line with uneven growth.
In a report out yesterday, Mr Faiz said the latest data showed "some early signs of the manufacturing-led growth recovery spilling over to the service sector, although this remains constrained to the trade-related segments".
"Services (growth is) finally showing some improvement, but it will take time for the recovery to firm up.
"Critically, private consumption and investment remain in the doldrums," he added.