Singapore's labour market faced a far more extensive impact from COVID-19 in Q2 2020, as compared to Q1 2020, the Ministry of Manpower's (MOM) latest Labour Market Advance Release Second Quarter 2020 revealed. Overall, retrenchments doubled from the previous quarter, while unemployment rates continued to rise in June 2020, and total employment contracted 'far more acutely'.
These details are summarised below:
Total employment contracted by 121,800
Singapore's total employment contracted by 121,800 in Q2, a sharper figure compared to what was reported in Q1 2020 (25,600). This was the largest quarterly decline ever recorded, with the report citing the severe limitation of COVID-safe measures on business activities.
In line with this, sharper employment cuts were observed in the manufacturing, construction, and services sectors, with the sharpest coming from services.
In particular, manufacturing saw a drop in employment by 9,600, while construction saw a drop by 14,300 and finally, services recorded the largest at -97,500, with food&beverage, retail, trade, arts, entertainment and recreation, and education the largest contributors affected by the circuit breaker and safe distancing measures.
Unemployment rose from 2.4% in March to 2.9% in June
Overall unemployment rates in Singapore stood at 2.9% as of June, a slight increase from 2.4% recorded in March.
Zooming in on the figures, resident unemployment stood at 3.9%, up from 3.3% recorded in March; while citizen unemployment rose from 3.5% to 4%. In total, there were 90,500 unemployed residents, out of which 79,600 were citizens.
Despite this rise, the report noted the figures continued to remain lower than those in previous recessionary peaks observed during the Global Financial Crisis and SARS, given the "extensive support measures" in place by the government.
Retrenchments surpass SARS peak, but remain lower than past recessionary peaks
According to the report, the number of retrenchments that took place in Q2 2020 doubled from that of the previous quarter (6,700 in Q2, vs 3,220 in Q1). While these numbers surpassed the peak experienced during SARS (Q2 2003: 5,510), they remained lower than other past recessionary peaks.
Amongst sectors, retrenchments were found to have risen 'significantly' in the wholesale trade as well as transport equipment sectors, reflecting reduced demand in both retail and air travel.
The report also noted that when compared to figures in April and May, a smaller proportion of companies polled in June indicated an intention to reduce salary or headcount over the following two months.
In specific, while 23.4% and 25.8% had intentions to reduce salary in April and May respectively, a lower 20.6% indicated so in June. Similarly, while 19.4% and 20.7% indicated in April and May respectively, that they intended to reduce headcount, the percentage stood at 16.7% in June.
Referencing both the unemployment and retrenchment figures in a Facebook post, Patrick Tay, Assistant Secretary-General, NTUC, said: "I expect both the retrenchment and unemployment figures to continue the upward trend in Q3 and Q4 especially with restricted travel, COVID-19 safe management measures as well as an overall uncertain outlook across many industries. Besides SMEs, LLEs and MNCs are also impacted with delayed/cut-back of investments, curtailed production, and freezes in global headcount."
Overall, he urged employers to "to engage the unions early and ensure our workers are protected and treated with respect during this difficult period."
As for non-unionised companies, ASG Tay called on employers to communicate regularly and be open and transparent to their employees, to build trust and understanding amidst this "difficult period," so as to emerge "stronger and more cohesive." He added: "Every of your actions during this period will be scrutinised by industry peers, the public and also employees."