SINGAPORE : Private sector bonuses are expected to be better this year.

A survey of 300 companies by the Singapore National Employers' Federation (SNEF) last month showed that half of them could be paying out bonuses of two to three-and-a-half months, with a median payout of 2.8 months.

The SNEF also expects the job market to continue to be very strong in 2008.

Speaking to Channel NewsAsia, SNEF's President Stephen Lee said the economy created 170,000 jobs in the first nine months of this year, or as many jobs as the whole of last year.

He added: "There is currently one job for every job seeker. This is compared to four years ago when there were four job seekers chasing after every vacancy. There is a big turnaround now."

However, low productivity remains a concern, with productivity growth staying flat this year.

Mr Lee said: "There is a congruence of factors. We are faced with a tight job market, we are faced with reasonable GDP growth, and we are also faced - for the first time - with high inflation situation. All these factors have exerted pressure on wages... and companies are responding.

"But from a national standpoint and a longer term standpoint, we do have to be careful that the wage increase does not totally outstrip productivity and start to negatively affect our international competitiveness."

The SNEF President said he has been urging companies which have done well to reward workers and plough the rewards into the monthly variable component, or MVC.

He said if the United States economy slips into a recession, then there will be ripple effects on the local economy and it is always good to be prepared for the not so good times.

But for now, Mr Lee said, the profit reports for many listed companies in the first half of the year reflect very good corporate performances. So bonus payouts in the private sector should be similar or slightly better than those of last year. - CNA/ch