SINGAPORE: The tide is finally turning for Singapore’s labour market, with total employment estimated to have expanded by 4,800 persons in Q1 2021 after four consecutive quarters of decline, according to advance estimates by the Ministry of Manpower (MOM).
Manpower Minister Josephine Teo called this a “significant turn” and “very encouraging”, report agencies.“It is indeed encouraging to see that the recovery was of a good enough pace, such that for the first time since Q4 2019, our total employment expanded. This is a significant turn, as it suggests that employers are regaining some confidence and they have taken on board more workers. Given the current travel restrictions, they also tended to look to local candidates,” she noted, following a visit to the NTUC LearningHub at Bras Basah.
Since peaking in September 2020 at 3.5 per cent overall, unemployment rates have fallen steadily over the past two quarters.
UOB economist Barnabas Gan highlighted that notwithstanding the improvement, Singapore’s labour market is still weaker compared to pre-Covid-19 levels.
Overall, unemployment rates eased a further 0.1 percentage point from 3 per cent to 2.9 per cent. For residents, this figure dipped from 4.1 per cent to 4 per cent, and for citizens, this dropped slightly from 4.3 per cent to 4.2 per cent. The overall figure is significantly higher than the five-year (2005-2009) average of 2.1 per cent said Mr Gan. Similarly, total employment clocked 3.61 million persons in Q1 2021, assuming the employment gain of 4,800 persons, compared to an average of 3.68 million persons over the same five-year period.
Mr Gan said he expects to see unemployment rate to fall further to 2.6 per cent in the fourth quarter of 2021, a sizeable improvement from 3.3 per cent in Q4 2020.
Meanwhile, retrenchments saw their second quarter of decline. At 2,100, Q1 retrenchments are equivalent to pre-Covid levels and a far cry from the peak of 9,120 in Q3 2020.The likelihood of retrenchment is expected to drop from 2.8 retrenched per 1,000 employees in Q4 2020 to 1.1 in Q1 2021.
In the meantime, business sentiments are looking up - 73 per cent of businesses polled in March 2021 say they have intentions to hire (up from 65 per cent in December).
But while businesses may gradually be regaining confidence to begin hiring, they are likely more at the stage of replacing displaced workers rather than aggressively expanding their workforce said Selena Ling head of treasury research and strategy at OCBC Bank.