Singapore's 4Q 2017 labour market sees decline in unemployment rates

In the latest Singapore’s Ministry of Manpower (MOM) Labour Market Advance Release 4Q 2017, preliminary data showed that Singapore’s labour market continued to improve. In fact, resident and citizen unemployment rates declined in December 2017 - this is lower than the previous quarter and a year ago.

Apart from the decline in unemployment rates in December 2017, other key findings include:

• Total employment increased, after contracting in the first three quarters of 2017
• Retrenchments were unchanged over the quarter, and remained lower than a year ago

The release stated that preliminary estimates showed that quarter-on-quarter, the seasonally adjusted unemployment rate declined for overall (from 2.2% in September 2017 to 2.1% in December 2017), residents (3.1% to 2.9%) and citizens (3.2% to 3.0%).

Total employment increased, after contracting in the first three quarters of 2017

Meanwhile, total employment - excluding foreign domestic workers (FDW)) grew in the fourth quarter of 2017 (10,700) - after contracting in the first three quarters of the year. The increase was due to larger employment growth in services from seasonal hiring. Manufacturing and Construction employment continued to contract, but at a slower pace.

Retrenchments were unchanged over the quarter, and remained lower than a year ago

The release showed that the number of retrenchments in the fourth quarter of 2017 (3,300) was similar to the previous quarter (3,400), and continued to be lower than the year before (5,440). retrenchments declined over the quarter in construction and services, but rose in manufacturing.

2017 full year review

The annual average unemployment rate for the four quarters of 2017 was higher than that in 2016 for overall (from 2.1% in 2016 to 2.2% in 2017), residents (3.0% to 3.1%) and citizens (3.1% to 3.3%). However as at the end of 2017, the unemployment rate in December 2017 was lower than a year ago for overall (from 2.2% to 2.1%), residents (3.2% to 2.9%) and citizens (3.5% to 3.0%). Not only that, local employment growth nearly doubled; while foreign employment declined more compared with 2016

In 2017, total employment (excluding FDW) was estimated to have declined by 10,700 (or -0.3%), a first since 2003. This was due to a contraction in foreign employment, even though local employment continued to grow.

According to the report, local employment grew by an estimated 21,300 (or 0.9%) in 2017, nearly double the growth in 2016. The increase occurred in most services sectors, including community, social and personal services, financial and insurance services, transportation and storage, and administrative and support services. On the other hand, foreign employment (excluding FDW) continued to decline in 2017 (-32,000 or -2.8%), mainly due to the decrease in Work Permit Holders in construction and marine. The foreign employment contraction was also larger compared to that in 2016 (-2,500).

When it comes to salaries, the report noted higher income growth at the median for Singaporeans. Year-on-year, the nominal median monthly income from work (including employer CPF contributions) of full-time employed citizens increased by 5.9% in June 2017, or 5.3% in real terms (i.e. after adjusting for inflation), higher than the growth in June 2016 (nominal: 0.7%, real: 1.3%). This could reflect the pick-up in economic growth, changing composition of the workforce and continued restructuring of the economy.

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Over the last five years from 2012 to 2017, the real income growth at the 20th percentile of full-time employed citizens (4.3% p.a.) was higher than that at the median (3.9% p.a.), supported by initiatives to raise the incomes of low-wage workers in recent years.

In conclusion, local employment is expected to continue to grow this year, albeit some unevenness across sectors. Job opportunities remain available in manufacturing sectors as well as services sectors such as infocomms and media, finance and insurance, healthcare, professional services, logistics and wholesale trade.

Moving forward, local workforce growth will remain modest due to underlying demographic trends and foreign workforce growth will continue to remain moderated. In this manpower-lean environment, companies are encouraged to keep transforming to remain competitive and at the same time create better quality jobs for Singaporeans.

The release said: “While unemployment and retrenchments have eased in recent quarters, job-skills mismatch continues to be a growing structural challenge due to on-going economic restructuring and shifts in composition of the resident labour force.”

“The tripartite partners will press on with efforts to support companies through the Lean Enterprise Development Scheme, and help workers to reskill and seize new job opportunities through the SkillsFuture and Adapt and Grow initiative,” it added.

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