SINGAPORE - Singapore's labour market continues to recover, with total employment expanding in the last three months of 2021 despite the outbreak of the Omicron variant, as the number of non-resident workers employed grew for the first time in two years.

The unemployment situation also improved, putting Singapore on track for unemployment rates to decline to pre-pandemic levels in the months ahead, said the Ministry of Manpower (MOM) on Friday (Jan 28).

The ministry added: "We expect the labour market to continue to improve in 2022, driven by an overall easing in domestic Covid-19 restrictions and the resumption of international travel. However, recovery to a pre-Covid state continues to be uneven across sectors, and uncertainty remains over the trajectory of the virus."

According to advance estimates released on Friday, total employment for 2021 had rebounded after the sharp contraction the year before. In the fourth quarter alone, total employment excluding migrant domestic workers grew substantially by 47,400.

This was the result of stronger resident employment growth and a smaller non-resident employment decline in 2021,said MOM.

Senior Minister of State for Manpower Koh Poh Koon told the media: “It is certainly a relief to see that the labour market has maintained its recovery trajectory in the last quarter of 2021, alongside positive economic growth, despite uncertainty over the global Covid-19 crisis from the Omicron variant.”

In December, the unemployment situation also continued to improve, although annual rates remained above pre-pandemic levels. Overall unemployment rate fell to 2.4 per cent in December from 2.5 per cent the month before.

The full-year unemployment rate dropped to 2.6 per cent overall, from 3 per cent before. But this is still above pre-Covid levels, the ministry noted.

Retrenchments also stayed low in the fourth quarter, and the number of people laid off in 2021 dropped significantly from 2020 - from 26,110 in 2020 to 7,820 in 2021.

MOM said the majority of layoffs in 2021 were due to reorganisation or restructuring rather than a recession or business downturn. 

"Over the year, retrenchments had declined considerably across construction, manufacturing, and services," it said.

The services sector showed the most improvement after a sizeable number of layoffs in 2020 due to the consumer-facing and tourism-related industries bearing the brunt of the pandemic then.

Part of the increase in resident employment reflects seasonal hiring due to the year-end peak period in the food and beverage services and retail sectors, MOM said. Employment grew in these sectors for the first time after consecutive quarters of declines.

Resident employment also rose steadily in outward-oriented sectors such as information and communications, as well as financial services. This is driven by the strong demand for digital solutions and games, and software publishing activities.

Meanwhile, there was a considerable increase in non-resident employment for the construction sector. This was in part due to the resumption of entry approvals for fully vaccinated workers for the construction, marine shipyard and process sector to enter the country from early November, the ministry noted.

The non-resident workforce in other sectors was relatively flat, after consecutive quarters of decline.

The ministry said that adopting a risk-managed approach in border control measures has allowed the non-resident workforce to rebound to a small degree after two years of sharp decline.

But the growth in non-resident employment at the end of the year could not make up for the declines in the first three quarters.

Still, with a smaller non-resident decline and faster growth in resident employment, MOM expects a rebound of 40,800 in total employment for 2021, compared with the contraction of 166,600 in 2020.

"We expect the non-resident workforce numbers to recover further in 2022," it added.

As for the resident workforce, MOM noted that overall resident employment grew much quicker than in 2020 and unemployment rates were steadily decreasing.

Dr Koh said: “The Government and our tripartite partners will continue to provide support so that we can achieve not just labour market recovery, as the economy and businesses restructure, but help our workers to also find new employment opportunities.”

Mr Patrick Tay, assistant secretary-general of the National Trades Union Congress, said in a Facebook post that he expects a more positive labour market in 2022 and beyond. 

“This is with the caveat that many businesses are and will be undergoing digital transformation, reorganisation, restructuring and re-strategisation which may impact roles while spiking demand in new skill areas,” he said, noting that economic recovery remains uneven.

He added that he hopes to see widened support for workers and employers to overcome the challenges of structural underemployment and unemployment. 

This support can come in the form of short-term salary help and enhancing workplace fairness, while ensuring companies have structured training plans, he said.