Total employment in Singapore grew for sixth consecutive quarter: Q1 2023 labour report

Meanwhile, unemployment rates were at the lowest since March 2015.

While Singapore's total employment expanded for the sixth consecutive quarter (33,000) this first quarter of 2023, the pace of increase did continue to moderate from 3Q 2022. By March 2023, total employment level was at 3.8% above the pre-pandemic level in December 2019.

Resident employment also continued to rise in Q1 2023 (2,800), and was 4.9% higher than its pre-pandemic level in March 2023. However, the increase in Q1 2023 was still lower than Q4 2022 (8,400) when there was strong seasonal hiring for year-end festivities. By sector, resident employment in Q1 2023 contracted in retail trade and food & beverage services as seasonal workers left employment, but grew in other industries such as financial services, public administration & education, professional services, and health & social services.

At the same time, the overall non-resident employment level exceeded its pre-pandemic level by 1.7% for the first time, but this was not observed across all industries. Non-resident employment exceeded the pre-pandemic levels in sectors typically reliant on non-resident employment such as construction and manufacturing. However, while non-resident employment in tourism and consumer-facing sectors such as retail trade, accommodation and food & beverage services had picked up following the lifting of pandemic-related restrictions in 2022, they have yet to recover to pre-pandemic levels.

Looking ahead, the report expects overall employment growth to moderate given the weaker external demand outlook and downside risks in the global economy.

NTUC Assistant Secretary-General Patrick Tay noted workforce stakeholders need to be watchful of three areas :

1) Continuing increase in retrenchments, which in Q1 2023 was mainly driven by Electronics Manufacturing (670 to 1,190), Information & Communications (370 to 560). and Financial Services (260 to 540). Retrenchments in other sectors have remained stable. Reorganisation or restructuring (47.7%) was the main reason for retrenchments, while 19.4% were due to recession or downturn.

He said: "I foresee the retrenchment numbers continuing into Q2 and may snowball into the second half of the year with weakening global demand and headwinds in certain industries such as Electronics Manufacturing and restructuring/consolidation in the ICT space."

2) The rate of re-entry into employment of those who are unemployed/retrenched.

3) Structural challenges such as skills and jobs mismatches, which he cited, continue to be one of the main causes of unemployment in Singapore in the near and medium term. He explained: "As such, we need to double down our efforts and build on our momentum to promote and encourage skills upgrading and acquisition to stay ready, relevant and resilient (such as through the NTUC Company Training Committees) and ensure our training efforts cater to the needs of the job market through Speed to Market Programmes which are relevant to the in-demand jobs/skills."

Unemployment rates lowest since March 2015

Unemployment rates trended lower in March 2023 at:

• Overall: 1.8%
• Resident: 2.6%
• Citizen: 2.7% 

They remained steady in April 2023. This decrease brought unemployment rates to their lowest since March 2015.

While the resident unemployment rates either stayed low or improved across most age and education groups in March 2023, there was more notable growth among those aged 60 and over. Their unemployment rate declined from 2.6% in December 2022 to 1.9% in March 2023. This was also an improvement from its pre-pandemic level of 2.6%. 

The unemployment rate among younger residents aged below 30 remained below its pre-pandemic level (5.6%), despite the growth over the quarter from 5.1% in December 2022 to 5.4% in March 2023. 

Lastly, the resident long-term unemployment rate (LTUR) held steady at 0.6% in March 2023, below pre-pandemic levels of 0.7%. In March 2023, the resident LTUR 2023 for all age and education groups were at or below their pre-pandemic averages. These included residents aged below 30, notwithstanding the latest increase in their LTUR over the quarter from 0.5% to 0.7%. Meanwhile, the LTUR for residents aged 60 and over (0.7%) also fell below its pre-pandemic level (0.8%) for the first time in March 2023.

Increase in retrenchments 

Retrenchments rose for the third consecutive quarter in Q1 2023, and reached 3,820. This was comparable to quarterly levels last seen in 2016/2017 (between 3,400 and 5,440) and remained below the peak during the height of the pandemic in Q3 2020. On a quarterly basis, the incidence of retrenchment among employees also rose from 1.4 retrenched per 1,000 employees in Q4 2022 to 1.8 in 1Q 2023.

The increase was driven by three sectors:

1. Electronics manufacturing (Q4 2022: 670; Q1 2023: 1,190),
2. Information & communications (Q4 2022: 370; Q1 2023: 560); and
3. Financial services (Q4 2022: 260; Q1 2023: 540).

In other sectors, retrenchments remained stable.

Reflecting the trend in Q4 2022, the rise in incidence of retrenchment among residents in the first quarter of 2023 was more pronounced for PMETs, and the tertiary educated. 

On a more positive night, despite the rise in the number of retrenchments, the number of employees placed on short workweek or temporary layoff more than halved in Q1 2023 to reach 420 (Q4 2022: 1,040). This was below the pre-pandemic level of 840 in Q4 2019.

Most of the affected employees were on short work-week arrangements (340 or 81.0%), of which came from food & beverage services (100), manufacturing (70) and health and social services (30). On the other hand, temporary layoffs came from sectors such as transport equipment manufacturing (20) and information & communications (10).

As of 1Q 2023, the majority (71.7%) of the retrenched residents were able to find employment within six months after retrenchment, despite this proportion declining from 73.1% in Q4 2022. Particularly, residents retrenched from the information & communications (77.8%) sector were more likely to find new jobs compared to retrenched workers from other industries.

Interestingly, among those who were retrenched from information & communications and found new jobs, majority (77.3%) found jobs in different industries, such as professional services and financial & snsurance services. 

Job vacancies declined, but remained elevated

Looking at job vacancies, the report notes signs that labour demand is cooling in some sectors.

While job vacancies declined for the fourth consecutive quarter in March 2023 to 99,600, the number of vacancies remained elevated. This is partly due to non-resident employment not having fully recovered to its pre-pandemic level in some tourism and consumer-facing sectors such as retail trade, accommodation and food & beverage services.

The bulk of the job vacancies in March 2023 continued to come from manufacturing and construction, as well as from growth sectors such as information & communications, financial services, professional services and health & social services.

Still, hiring outlook remains positive in the coming months. Based on MOM’s company polls, 64.8% of firms in March 2023 planned to hire in the next three months, comparable to December 2022. Lastly, labour turnover has returned to pre-pandemic levels — in Q1 2023, the recruitment rate dipped to 2.3% while resignation rate stayed at 1.5%.

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All images / Ministry of Manpower Labour Report Q1