The labour market has not quite turned the corner despite showing signs of recovery, analysts said.
They were responding to Manpower Ministry data released yesterday that shows a dip in the unemployment rate for Singaporeans after accounting for seasonal variations, and a slight decline in layoffs.
The unemployment rate was 3.2 per cent in September, down from 3.3 per cent in June, while the number of layoffs in the third quarter was 3,400, down from 3,640 in the previous three months.
Companies are not investing and hiring as aggressively as they did in past economic cycles, as restructuring and a stricter foreign worker policy have "thrown a spanner into Singapore's labour market", said Maybank Kim Eng economist Chua Hak Bin.
This runs counter to the quick turnaround in the labour market seen in past economic recoveries.
In 2009, for example, employment levels surpassed pre-crisis levels in two quarters after Singapore emerged from recession in mid-2009.
The Ministry of Trade and Industry has recently upgraded Singapore's growth forecast for this year to 3 to 3.5 per cent.
Despite the positive outlook, Dr Chua and Singapore University of Social Sciences economist Walter Theseira said businesses may not be fully confident that growth in their sectors is on an upward trajectory for the long haul.
Said Dr Theseira: "They may not be willing to expand their headcounts if sustained growth is not coming from their sector, and may choose to cope with demand by offering overtime and other incentives to existing workers instead."
They may not be willing to expand their headcounts if sustained growth is not coming from their sector, and may choose to cope with demand by offering overtime and other incentives to existing workers instead.
DR WALTER THESEIRA, Singapore University of Social Sciences economist, on businesses being not fully confident that growth in their sectors is on an upward trajectory for the long haul.
The economic outlook for this year was raised primarily due to the manufacturing boom, said CIMB Private Banking economist Song Seng Wun. But growth remains uneven in other sectors, he added.
Technological disruption has seen some sectors like retail continuing to shed workers, said Mr Song, who noted that even the boost in manufacturing has not lifted employment in the third quarter of this year.
The reason is that the sector tends to be more capital-intensive, and relies more on technology than labour.
Employment in manufacturing declined this year, with 10,100 workers shed in the first nine months against 8,900 in the same period last year.
Similarly, employment in construction fell for the fifth quarter in a row. About 9,500 workers were shed in the third quarter, bringing the total number of workers shed in the first nine months to 32,600.
The services sector, however, saw employment growing by 26,200 in the first three quarters of this year, the bulk of whom were hired in community, social and personal services; administrative and support services; financial services; and information and communication.