Among the findings, the Manpower Research and Statistics Department noted signs that demand in the labour market is cooling.
Singapore's labour market was stable in Q2 2023, with continued employment growth and low unemployment rates, according to the Labour Market Second Quarter 2023 report published on Thursday (14 September 2023).
The number of retrenchments recorded in the quarter also declined, following three quarters of increases. That said, the report, published by the Ministry of Manpower's Manpower Research & Statistics Department (MRSD), noted signs that demand in the market is cooling, with employment growth moderating "significantly" and the number of vacancies continuing to trend down.
Highlights of the report – which analyses employment, unemployment, retrenchments, and more, are detailed below.
Total employment growth moderated significantly for the third consecutive quarter
According to the report, total employment growth "moderated significantly" in Q2 2023, recording 24,300 more people in employment. This is the third consecutive quarter of moderation, after reaching an unprecedented high in Q3 2022 (75,900).
Breaking down the data, resident employment contracted for the first time since Q2 2020, which 1,200 residents employed in Q2 this year. This, the report noted, was largely due to seasonal effects in the food & beverage services sector (-1,300) and retail trade sector (-1,300).
While this was so, the resident employment level remained 4.8% above what was recorded in 2019.
Finally, resident employment continued to grow at a "healthy pace" in sectors such as community, social & personal services, and financial services – albeit moderating from 2022 when businesses opened up positions rapidly during the post-pandemic recovery.
Looking at non-resident employment, growth in this category continued to ease for the third consecutive quarter, recording 25,500 more people. By sector, construction accounted for close to half of the total non-resident employment growth, while the remaining increases were spread across many sectors as firms were still backfilling positions vacated by non-residents during the pandemic; however, their pace of increase has mostly moderated, the MRSD noted.
"We expect resident employment growth in Q3 and Q4 to be boosted by the recovery in tourism, particularly with events such as F1 and year-end festivities which will bolster labour demand in accommodation & food services and arts, entertainment & recreation.
"However, increases will likely be lower than the same period in previous year, in line with the cooling labour demand as well as a slower resident labour force growth."
Unemployment rates remained low in June 2023
Unemployment rates in Singapore remained low in June this year, with the overall rate standing at 1.9%, resident unemployment rate standing at 2.7%, and citizen unemployment rate standing at 2.8%.
The MRSD observed: "They have hovered near historic lows in the first half of 2023, but these are unlikely to be sustained. With economic growth projected to be weaker, unemployment is likely to inch up modestly over the coming months."
Unemployment by age group & education group
Across most age groups, the resident unemployment rates either stayed low or improved in June 2023, according to the findings. However, the Department pointed out the slower labour market momentum is likely to affect older workers more.
Delving deeper, it shared that in June 2023, there were "signs of rising vulnerabilities" for those aged 60 and above as their unemployment rate increased from 1.9% in March 2023 to 2.3% in June 2023.
On the other hand, after reaching a one-year high of 5.4% in March 2023, the unemployment rate for young workers aged below 30 dropped to 4.6% in June 2023 – which the report stating this could be likely due to them finding jobs after graduation.
Next, by education groups, the resident unemployment rates in June 2023 were similar to those in March 2023. However, the unemployment rate among secondary-educated residents increased to 2.8% in June 2023, from a low of 2.4% in March 2023, which was last seen in December 2017, according to the report.
Overall, by both age and education groups, the resident long-term unemployment rate for all age and education groups remained low in June 2023 and stayed similar to the levels in March 2023. These included residents aged below 30, which saw an improvement from 0.7% in March 2023 to 0.4% in June 2023, last seen a year ago.
Additionally, it was shared, compared to their younger counterparts, older workers aged 50 and above remain more likely to be long-term unemployed: The long-term unemployment rate for residents aged 50 to 59 increased to 0.8% in June 2023, and for those aged 60 and above, it stayed at 0.7%. These were still lower than pre-pandemic levels.
Retrenchments declined from 3,820 in Q1 2023 to 3,200 in Q2 2023
Following three quarters of rise, retrenchments in Singapore declined from 3,820 in Q1 2023 to 3,200 in Q2 2023.
"Retrenchments may fluctuate from quarter to quarter as they tend to be lumpy," MRSD highlighted.
Looking at the reasons for retrenchments, the Department highlighted that reorganisation or restructuring (69.9%) continues to be the main reason for retrenchments. A smaller percentage of was due to concerns of high costs (16.9%), likely from inflationary pressures; while some (14.1%) were worried about an impending recession.
In terms of sector/industry, most were seen in information & communications (860), with many due to reorganisation or restructuring than concerns of recession.
Overall, the report found, firms in information & communications are still looking to hire, with 6,700 openings in June 2023.
Meanwhile, electronics manufacturing – which saw the highest retrenchments in Q1 2023 (1,190) – retrenched fewer employees in Q2 2023 (200).
Photo: Labour Market Second Quarter 2023, MRSD