The job market perked up in the third quarter, but Singapore is not out of the woods yet and recovery may be a long process.
A Ministry of Manpower (MOM) market report yesterday shows that employment rose among residents to near pre-Covid-19 levels, while job vacancies were up for the first time this year.
Experts said these are positive signs that the labour market decline is moderating.
Resident employment was up by 43,200 to 2.34 million in September, just 0.4 per cent lower than in the same month last year.
But retrenchments still rose in the third quarter.
There were 49,600 job vacancies in September, seasonally adjusted, up from 42,400 in June.
Overall, the support measures for local employment played a key role in stabilising the job market, Manpower Minister Josephine Teo said yesterday.
These include the Jobs Support Scheme and National Wages Council guidelines, which helped to preserve a strong Singaporean core across all sectors, she added.
The SGUnited Jobs and Skills Package saw a higher-than-expected take-up of positions.
Almost 60,000 local job seekers were placed into work and training opportunities under the package from April to October, the MOM said in its weekly jobs report, also out yesterday. More than 120,000 openings are still available.
Other indicators also point to labour market improvement. Total employment excluding foreign domestic workers declined by 29,100 in the third quarter, a much slower pace compared with the plunge of 103,800 in the second quarter.
While the seasonally adjusted overall unemployment rate rose in September to 3.6 per cent, it was at a slower pace than the months before. But retrenchments continued to rise, hitting 9,120 in the third quarter, from 8,130 in the second.
Mrs Teo warned that challenges lie ahead as the nature of jobs changes. "We are mindful that moving forward, we will still see retrenchments and people making transitions as transformation efforts continue."
Experts agreed that while there are glimmers of hope, it will not be all smooth sailing.
Ms Selena Ling, OCBC Bank's head of treasury research and strategy, said: "For 2021 as a whole, the overall and resident unemployment rates may still be slow to return to pre-Covid levels due to the long-tail nature of the pandemic."
She added that retrenchment might still climb as some firms may not survive.
Maybank Kim Eng senior economist Chua Hak Bin noted that employment is recovering more slowly than economic activity. "With local employment on the mend, the big question for businesses and the economy is whether foreign employment will also start to turn around."
National University of Singapore Business School's Associate Professor Lawrence Loh said: "What is more worrying is retrenchment due to structural mismatch, which means that the existing jobs become obsolete and new or higher skills are needed."
Permanent Secretary for Manpower Aubeck Kam said: "Covid-19 has also accelerated the pace of business transformation, and we have to prepare that unlike cyclical downturns, some jobs may not return. (Thus), labour market recovery may continue well beyond the immediate rebound but may remain protracted."