A total of 11,350 people were retrenched in Singapore in the first half of the year (H1 2020), a sharp rise from preliminary estimates released in July (9,920).
According to the Ministry of Manpower's latest Labour Market Second Quarter 2020 report, these figures surpassed what was recorded in the SARS period (H1 2003: 10,120), but remained lower than other past recessionary peaks.
At the same time, the number of people placed on short workweeks or temporarily laid off in the second quarter of the year reached 81,720, a sharp jump from just 4,190 in the previous quarter (Q1 2020). While this was considered an unprecedented high, it did likely reduce the total number of retrenchments, the report noted.
Apart from the above, the report showed that while 39% of employees who were retrenched in Q1 2020 were able to find new jobs by June, the overall six-month rate of re-entry into the workforce declined to an all-time low in the second quarter (58%).
Overall, the ratio of job vacancies to unemployed persons also declined further, from 0.71 recorded in March 2020 to 0.57 recorded in June 2020. In other words, this meant just 42,400 vacancies were available in June, down from 46,300 in March.
Total employment contracted by 129,100 in HQ 2020
In the first half of the year, the total employment recorded (excluding FDW) contracted by 129,100, the largest half-yearly reduction on record.
Foreign cutbacks were also more widespread across sectors. This was reflected in the Employment Diffusion Index, a measure of the breadth of employment change across industries, which was higher for locals (38.4) than foreigners (16.8).
- Foreign employment cuts mostly involved Work Permit & Other Work Passes (WP+: -51,100), followed by S Pass (-11,200) and EP (-4,100). Excluding work pass holders from the construction, marine shipyard and process sectors, the decline in WP+ was -32,900.
Apart from the above, the report also showed that the total unemployment rates (seasonally adjusted) rose quarter-on-quarter, from 2.4% recorded in March to 2.8% in June.
- Resident: from 3.3% to 3.8%
- Citizen: from 3.5% to 4.0%)
Once again, however, this remained lower than previous recessionary peaks. According to the report, the increase in resident unemployment rate over the quarter was driven by an increase in the number of short-term unemployed, as the seasonally adjusted resident long-term unemployment rate dipped in June 2020 (from 0.9% to 0.8%).
Commenting on the findings, Patrick Tay, NTUC Assistant Secretary-General, said: "These times call for businesses and workers to come together, press on with restructuring and reskilling, so as to seize new opportunities and emerge stronger.
"Businesses should press on to find and pivot to new opportunities, and workers should embrace the transformation of the jobs, and the reskilling that comes with transformation."
Looking ahead: Softness in labour market likely to persist, but bright spots still exist
Moving forward, continued uncertainties in the global economy, as well as subdued external demand, will weigh on the labour market in the second half of the year. Hence, the report noted that softness in the labour market is likely to persist with continued weakness in hiring and pressure on companies to retrench.
That said, it's not all doom and gloom, as there are still bright spots in certain areas.
For example, the electronics and precision engineering clusters are likely to expand, driven by sustained global demand for semiconductors and semiconductor equipment.
The biomedical manufacturing cluster is also expected to grow, supported by the production of pharmaceutical and biological products.
Likewise, the information & communications sector is projected to expand this year on the back of continued demand for IT and digital solutions, while growth in the finance & insurance sector will be supported in part by the strong demand for digital payment processing services.
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