The unemployment rates of Singapore’s resident and citizen went up in July by 0.2 percent respectively, and this jump happened for the first time in 10 months following tightened COVID-19 restrictions under Phase 2 (Heightened Alert).
Based on figures released by the Ministry of Manpower (MOM) on Monday (6 September), it showed that resident unemployment rate increased from 3.5 to 3.7 percent, while unemployment among Singapore citizen rose from 3.7 to 3.9 percent.
The overall unemployment rate in July was 2.8 percent, which is an increase from 2.7 percent in June.
Manpower Minister Tan See Leng said in a Facebook post on Monday that the rise in unemployment most likely reflected “a dip in demand for manpower in affected sectors such as F&B and retail trade”.
Singapore moved to Phase 2 (Heightened Alert) from 22 July to 18 August after rising number of COVID-19 cases were reported in the country due to the-then growing Jurong Fishery Port clusters. The measures to curb the spike in cases include prohibiting dining-in at all F&B establishments and reducing the size of social group from a maximum of five people to two.
“We will continue to monitor the unemployment rates closely. The Singapore Ministry of Manpower will also provide a more comprehensive update in our Labour Market Report later this month,” said Dr Tan.
In his post, Dr Tan also said that the measures will be relaxed soon as more sectors reopens and this will boost manpower demand and recover the labour market.
“As Singapore moves towards becoming a COVID-resilient nation, measures will be relaxed further as more sectors of our economy reopen,” he said.
He also encouraged “companies to constantly pursue innovation and review their business operations to meet the changing needs of the economy”.
“Jobseekers can also tap on initiatives such as the SGUnited Jobs and Skills Package to be placed into jobs and skills opportunities.”
Commenting on the rise in unemployment rate, analysts pointed out that this figures are expected given the temporary measures implemented to curb the spread of COVID-19 under Phase 2 (Heightened Alert.
“Since then, the vaccination rates have reached targets and there is a phased reopening ahead, so I think it should not derail the economic recovery, or the continued healing of the domestic labour market in 2022,” said Ms Selena Ling, chief economist and head of treasury research and strategy at OCBC Bank, in a report by The Straits Times (ST)
She added, “With the Vaccinated Travel Lanes to Germany and Brunei and more to come, the aviation and hospitality sectors may have some upside in the coming months.”
On the other hand, Maybank Kim Eng economist Chua Hak Bin was also reported saying to ST that he sees the unemployment rates as reflecting a “temporary pause”.
“Firms that had to downsize during the heightened measures will still need to provide some notice period to employees. The job market will likely recover with the recent reopening,” he said.
However, Dr Chua warned that job market recovery, is not a straight line trajectory and may still face a bumpy and winding road ahead even with the economic reopening”.
