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Leong Sze Hian questions stats on the economy.

10 important – and worrying – statistics of 2008

Leong Sze Hian / Columnist

10 Negative statistics: Real wages down, unemployment up, productivity down, business costs up?

I refer to media reports about the Ministry of Manpower's Labour Market Third Quarter 2008 Report. I have analysed the report, and would like to point out the following negative aspects of the statistics:

…. Average (mean) Monthly Nominal Earnings Per Employee fell by 15 per cent, from $4,316 in the first quarter to $3,674 in the third quarter.

…. Real Earnings fell even more by 17 per cent for the same period, from $3,982 to $3,307.

…. 45.1% of unemployed residents were age 40 and over. This category had the highest proportion of the unemployed, with those age below 30, and 30-39, at 31.0 and 23.9% respectively.

…. Change In Labour Productivity has fallen in the last four consecutive quarters to a record low of –9.6 per cent.

…. On an annualised quarter-on-quarter basis, GDP growth declined by 6.8 per cent, continuing the contraction experienced in the second quarter (-5.3).

….. Resident unemployment rate (seasonally adjusted) rose to 3.3% in Sep 08 from 3.1% in Jun 08.

…. Resident Long-Term and Longer-Term Unemployment Rate (Non-seasonally adjusted) increased to 0.5 per cent in S08 from 0.4 per cent in S07.

….. Re-employment Rate of Resident Retrenched Workers (Within 6 months After Retrenchment) fell from 79% in Jun 08 to 62% Sep 08).

….. Hiring sentiment for Q4 08 was unfavourable as a net 3% among manufacturing firms predict headcount trimming in tandem with their gloomy business prospects prediction ahead.

….. Overall unit labour cost (ULC) rose for the tenth straight quarter, with the increase accelerating to 13% in Q3 08 from 10% in Q2 08. Unit business cost (ULC) went up by 12% in Q3 08.

In the light of the above statistics, I would like to suggest that we consider other measures in addition to the $600 million SPUR package, to address the rapidly deteriorating employment situation.

1 Positive announcement: Helping Singaporeans to downgrade?

I refer to the article “4,000 smaller HDB flats coming up” (ST, Dec 19).

The report said:

HDB deputy chief executive Tan Poh Hong said yesterday that the board has revived smaller flats on a large scale as “There are more people who will need to downgrade, as well as first-timer families who would also like to start with smaller flats to be financially prudent. underscores the issue that the affordability of HDB flats may be a concern for many Singaporeans.

Since there is a 30-month waiting period for those who downgrade to a smaller new HDB flat, how does this revival of building new smaller flats help “more people who will need to downgrade”?

As the household income ceiling of $2,000 and $3,000 for those purchasing 2 and 3-room flats respectively have not changed for many years despite rising prices of new HDB flats, some Singaporeans may be forced to buy larger flats than they can afford.

So, how can “families who would also like to start with smaller flats be financially prudent”?

Therefore, I would like to suggest that these policies be reviewed.

With the recession just starting, since the market-pricing policy links new HDB flat prices to re-sale prices which are at a record high now, will these new BTO flats’ prices be adjusted if resale prices are much lower when the flats are actually built in a few years’ time?

The statistic that as of October, 33,000 HDB concessionary loans (not counting HDB bank loans) are in arrears over three months, which is about 1 in 12 HDB concessionary loan mortgages, perhaps underscores the issue that the affordability of HDB flats may be a concern for many Singaporeans.

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