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More locals employed, income growth strengthened: MOM

Local employment growth during 2013 was 81,600, up from 58,700 in 2012. Growth in employment of foreigners slowed to 53,300 from 70,400 in 2012, according to the Manpower Ministry's report on Singapore's employment situation in 2013.

SINGAPORE: Local employment rose more quickly in 2013, as the growth in the number of foreign workers continued to moderate amid tightened foreign manpower measures, according to the Manpower Ministry's report on Singapore's employment situation in 2013.

For the whole of 2013, total employment was estimated to have increased by 134,900 over the year, higher than the 129,100 in 2012.

The ministry said the higher employment growth over the year was mainly driven by locals.

Local employment growth during the year was 81,600, up from 58,700 in 2012. Growth in employment of foreigners slowed to 53,300 from 70,400 in 2012.

In December 2013, locals accounted for 66.2 per cent of persons employed in Singapore (excluding foreign domestic workers), with foreigners forming 33.8 per cent.

Specifically for Q4, employment growth was higher, at 39,200, compared to 33,100 in Q3, and most of these jobs were created in the services sector.

An economist said though Singapore's employment situation remains better than expected, there could be underlying structural issues.

Even though more jobs were created in Q4 than in Q3, the gross domestic product for Q4 was lower, at 4.4 per cent compared to 5.9 per cent in Q3.

NUS Associate Professor for Economics, Shandre M Thangavelu, said: "When you look at the fourth quarter, we created about 39,000 jobs or so, but when you look at the GDP numbers for the fourth quarter, it has moderated down, which basically means that labour productivity might be declining in the fourth quarter compared to the third quarter.

"This means that labour productivity will be a very important issue, going forward. When you look at the various components of labour productivity itself, two important issues come into play.

"One is small- and medium-sized enterprises because they form a large employment share of our overall employment, accounting for nearly 60 per cent or so, which basically means that we need to handle the productivity of our SMEs in order to address overall productivity itself.

"The second component is that most of the jobs are created by the services sector, which basically means that improving the productivity of the services sector will be a very crucial policy decision or structural decision that we need to make, going forward for the next five years or so."

The number of layoffs in Q4 of 2013 was 3,500. The figure was much lower than the recession high of 6,000 to 12,000 every quarter in 2008 and 2009.

But the 3,500 layoffs in Q4 also represented a 30 per cent increase compared to Q3.

Professor Shandre said the bulk of the layoffs was in the manufacturing sector, and this could be a signal of economic restructuring as companies invest in innovation to improve their productivity.

He said: "(In) the manufacturing sector, for the fourth quarter, the job creation has declined, which basically means that there might be more shift towards capital investment, capital substitution itself.

"That is a good thing, because that is where you're going to see innovation and restructuring (occurring).

"At the same time, we also must observe that when redundancy rate moderates, that means high-technology sectors might be retrenching workers, but that might not be creating the same type of jobs again.

"So what we will have is, in a tight labour market, a set of workers who do not have the relevant skills to meet the new kind of jobs that can be created.

"That basically means that together with capital investment, we need to think about training, retooling and retaining our workers within the same sector, because that's where you find wages tend to rise and, or, moving them across different sectors, like the services sector where better quality jobs can be created."

MOM figures also showed that income growth had strengthened in 2013.

After accounting for inflation, the growth in real median income of full-time employed Singapore Citizens was 4.6 per cent in 2013, up from 1.2 per cent in 2012.

Moving ahead, an analyst expects Singapore's labour market to remain tight.

Mr David Ang, Human Capital Singapore's director of capability and business development, said: "If you look into where the hiring industries are -- finance and accounting -- they still need people.

"If you look at banking and financial services, they also need people. If you look at the teaching profession, it also needs people. If you look at the professional services sector, it also needs people.

"And the F&B and hospitality sectors, with the tightening of the foreign labour numbers, they are still in need of people.

"But which industry will probably see some tightening? It's the manufacturing. But having said that, manufacturing (companies) might be relocating their activities to the region from where they could operate more cheaply. We must say there are also employment opportunities, especially for engineers and so on.

"The manufacturing and the chemical industry -- they will be needing a lot of people because they need to strengthen the internal control, they need to streamline processes and so on, and people who have experience with quality control, health and safety will find a lot of opportunities as we move on in 2014."

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