Singapore labour market shows signs of recovery

In 2017, fewer workers were retrenched, and the pay of the average Singaporean worker went up.
In 2017, fewer workers were retrenched, and the pay of the average Singaporean worker went up.PHOTO: ST FILE

Fewer workers retrenched for first time in 7 years; pay of average S'porean worker also up

For the first time in seven years, fewer workers were retrenched last year. The pay of the average Singaporean worker also went up.

These improvements indicate the labour market has started to recover, following better-than-expected economic growth last year.

Economists interviewed yesterday, after the Ministry of Manpower (MOM) released the preliminary full-year data, are optimistic the pickup will continue this year.

DBS economist Irvin Seah believes the turn for the better in the service sector will make growth more sustainable in the long term. This, in turn, will create more jobs.

"It is a case of 'a rising tide lifts all boats'," he added.

The service and manufacturing sectors are credited for pushing layoffs down to 14,340 last year, from 19,170 in 2016.

Another good thing is the increased number of local residents in employment, although overall employment fell.

Despite the improvements, the annual average unemployment rate of Singaporeans went up last year, reaching 3.3 per cent against 3.1 per cent in 2016.

This partly pushed up the overall jobless rate to 2.2 per cent, from 2.1 per cent.

But the quarterly rates show Singapore turned the corner in the second half of last year. Last December, the unemployment rate for Singaporeans, adjusted for seasonal variations, was 3 per cent, down from 3.5 per cent a year earlier.

When citizens are combined with permanent residents, the rate was 2.9 per cent, down from 3.2 per cent.

Observers said the improved figures in the last quarter reflect higher economic growth, which hit 3.5 per cent last year, more than double the initial forecasts. This year, it is expected to expand between 1.5 per cent and 3.5 per cent.

OCBC economist Selena Ling said that though fresh graduates and professionals, managers, executives and technicians should face better prospects, the unemployment rate will not improve much as it is already quite low.

Another boon for Singaporeans is that those with incomes at the median - midpoint in a range - saw their earnings grow faster last year.

After taking inflation into account, the real median income of full-time Singaporean workersrose 5.3 per cent year-on-year as of June. It was 1.3 per cent the year before.

These income figures include employers' contributions to the Central Provident Fund.

The higher median could reflect the pickup in economic growth and continued skills upgrading of the workforce, said the MOM.

Lower-wage Singaporeans also saw their real income go up.

DBS' Mr Seah said the strong wage growth could be due to the labour market becoming less slack, and companies passing on rewards to workers.

Mr Patrick Tay, who chairs the Government Parliamentary Committee for Manpower, finds the income growth encouraging.

But workers tell him that daily essentials are more costly, "resulting in many not feeling the real positive income increases", he said in a Facebook post.

As for job opportunities this year, the MOM said they are in manufacturing and the service sector.

But some obstacles remain, it cautioned. "Job-skills mismatch continues to be a growing structural challenge due to ongoing economic restructuring and shifts in the composition of the resident labour force."

SEE TOP OF THE NEWS

A version of this article appeared in the print edition of The Straits Times on January 27, 2018, with the headline 'Singapore labour market shows signs of recovery'. Print Edition | Subscribe