The Ministry of Manpower (MOM) released a labour market report on Thursday (12 March) highlighting that business uncertainties have led to cautious hiring by firms which have reduced job availabilities for the entire 2019 compared to 2018.
Last year, employment grew by 57,000 jobs in net terms, which is an increase from 38,300 jobs in 2018 while also making 2019 the strongest growth in five years. As for retrenchments in 2019, it remained low at 10,690 which is similar to 10,730 in 2018.
According to the Manpower Minister Josephine Teo in the report briefing to reporters, the resident re-entry rate was “one of the things that was quite encouraging last year”. The resident re-entry rate represents retrenched Singapore residents who returned to work in 2019.
MOM’s media statement read “The labour market held up in 2019, but the outlook for 2020 is uncertain against the backdrop of global economic uncertainties and the evolving Covid-19 outbreak.”
The decline in the ratio of job vacancies to unemployed persons reflects the decline in hiring sentiment last year. If one job vacancy is available for every person looking for work, the figure will be one. A higher figure means that prospects are better for job seekers.
December’s ratio of 0.84 was the same as September last year. However, this figure is the lowest since the mid-2017 and a steep decline from mid-2018’s 1.09.
The MOM report stated that the decline in the number of available jobs in the whole economy is the reason behind the decline. The fall in vacancies in small private sector firms (with workers less than 25 people) is greater than the increase in vacancies larger private firms.
Ms Teo recalled that this seasonally-adjusted ratio dropped below 0.5 during the 2003 SARS outbreak. During the 2008 global financial crisis, it also declined to 0.53.
In Singapore, the most impacted sectors are retail, tourism, air transport and food services and Ms Teo stressed that if large scale job losses can be avoided, not many people will be negatively affected even if the ratio does not increase by a lot.
The main priority now is to preserve jobs, because an increase retrenchment rates will turn the labour market “very unfavourable”, she cautioned.
In light of all this, Ms Teo was surprised at the unexpected slight increase in the re-entry rate to 65.9 per cent in 2019 as she had thought it would stay at 2018’s 64.2 per cent.
The net new jobs totally 57,000 last year was an “unexpectedly good” outcome, even in the midst of economic challenges, Ms Teo remarked. This figure accounts for job losses but not foreign domestic workers.
She added that “It was better than most of us could foreseeably expect given the uncertainty”.
Total employment rose with the increase in 28,300 net new jobs to locals last year, from 27,400 in 2018. Also, 2019’s foreign employment growth, not including construction, dropped to 14,900 from 16,300 in 2018. New jobs that went to foreigners amounted to 28,700, not including foreign workers in the construction sector as well as foreign domestic workers.
The sectors that fuelled employment growth were the construction and services sector. Last year, the construction sector saw a first ever 12,500 increase in employment in four years. Also, the services sector saw an increase by 47,000 workers in 2019, similar to 2018 with employment increases in community, social and personal services, professional services and information and communications. On the other hand, there was a decline by 2,400 workers in the manufacturing sector last year, making it the sixth consecutive year of decline.
The MOM report highlights that unemployment rates stayed in the comparatively low range of recent years, despite the slight increase in 2019. The annual average resident long-term unemployment rate remained steady at 0.7 per cent.
Ms Teo stated thought that “it will be a challenge to keep unemployment at this sort of relatively low ranges. So for the next few months at least our focus is really to prevent large scale job losses.”
Based on the report, citizen unemployment rate stood at 3.3 per cent last year, an increase from 3 per cent in 2018. Also, resident unemployment rate (the combination of Singapore citizens and permanent residents) increased to 3.1 per cent last year, an increase from 2.9 per cent in 2018. As for the overall unemployment rate (including both foreigners and residents), it increased to 2.3 per cent last year, a small spike from the 2.1 per cent in 2018.
As of December last year, the number of unemployed residents was 73,900. From this figure, 63,500 form Singapore citizens who were jobless in 2019.
According to MOM report, vacancies in December 2019 were less than in December 2018 because companies are more cautious in hiring as a result of poor business sentiments.
The fall in job vacancies was “broad based” in 2019, the report noted. In the production and related sectors, particularly the construction sector, there were 3,900 job vacancies lost. Also, in sectors such as transportation and storage as well as administrative and support services saw job vacancy loss among clerical, sales and service workers totally 2,300. Primarily in the manufacturing sector, 1,600 professionals, managers, executives and technicians (PMETs) job vacancies were lost.
Retrenchments and re-entry rate
The most cited reason for business restructuring and organisation was retrenchments. Last year, 68 per cent of companies cited this reason as well as 46 per cent of companies in 2018.
According to the report, sectoral downturns has led to an increasing trend in retrenchments, with 21 per cent of downsizing firms citing that reason last year and 13 per cent in 2018.
A total of 73.6 per cent of local retrenchments are made up of PMETs last year, although there was a decrease from 75.8 per cent in 2018. A larger proportion of the workforce is made up by PMETs but now the likelihood of retrenchment was less, the report stated.
The ratio of PMETs among employed locals generally mirrored the profile of retrenched locals. The report highlighted that most retrenchments happened in PMET-dominated sectors.
Most retrenchments took place in the services sector at 66 per cent, especially in financial services, professional services and wholesale trade. On the other hand, 8 per cent retrenchment was in the construction sector and 26 per cent in the manufacturing sector.
Amidst these decreases, there was also some growth in re-entry rates last year to 65.9 per cent, a slight rise from the 64.2 per cent in 2018. A total of 67 per cent of Singapore residents who re-entered the labour market got a job in a different industry compared to their previous jobs. The report noted however that those from retail trade and construction jobs were more likely to re-enter a similar industry.
MOM is “working hard” to boost re-entry rates by finding firms who are still employing workers so that these displaced workers can be matched to those firms, Ms Teo assured.
MOM had launched an initiative to identify all job openings and firms who were hiring in many growth sectors, such as manufacturing, healthcare and financial services even prior to the coronavirus outbreak. Jobseekers had published job adverts to notify them of the available openings, “so don’t give up just yet”, Ms Teo encouraged.