SINGAPORE: Singapore’s unemployment rate rose to 3.6 per cent in September but at a slower rate compared to previous months, as the country reopened from a COVID-19-induced slowdown.
Even then, officials warned that labour market conditions will stay soft amid the prolonged economic downturn.
Third quarter estimates from the Ministry of Manpower (MOM) released on Friday (Oct 30) showed that the overall unemployment rate crept up by 0.2 percentage points from 3.4 per cent in August, which had already surpassed the high recorded during the peak of the global financial crisis.
The rate among Singaporeans and permanent residents went up from 4.6 per cent in August to 4.7 per cent, while the citizen unemployment rate increased from 4.7 per cent in August to 4.9 per cent.
This brings the total number of unemployed residents to 112,500, of which 97,700 are Singaporeans.
The pace of increase slowed in September - a 0.1 to 0.2 point hike - compared to the 0.3 to 0.4 point gains seen in the previous months, the ministry noted.
A total of 9,100 workers - 7,000 in services, 1,900 in manufacturing and 200 in construction - are likely to be retrenched in the third quarter, exceeding previous recessionary highs except the one during the global financial crisis, when 12,760 people were retrenched in the first quarter of 2009.
The latest estimate brings the expected number of layoffs so far this year to 20,450, of which 57 per cent are residents.
MOM warned that retrenchments are forecast to rise over the quarter in the manufacturing and services sector, primarily in arts, entertainment and recreation, and air transport, as these areas continue to be affected by the pandemic and the need for safe management measures.
On the other hand, there will be fewer job losses in construction as activities in the sector have gradually resumed after the "circuit breaker", the ministry said.
Employment - excluding foreign domestic workers - shrank by 26,900, largely due to the number of job cuts among non-residents in the construction and manufacturing sector.
This comes after a record 103,800 decline in the second quarter.
However, employment picked up in the services sector, mainly among community, social and personal services such as healthcare and public administration, and food and beverage players, MOM said. Resident employment also rebounded in the third quarter to near pre-COVID-19 levels, from 2.29 million in June to 2.34 million in September.
Resident employment was 2.36 million at the end of last year.
Non-resident employment continued to fall, from 1.10 million in June to 1.03 million in September. It was at 1.17 million in December last year.
MOM said though there were job gains among residents as businesses resumed, the labour market will remain soft.
"Weakness in the labour market is likely to persist as companies and workers continue to operate in an uncertain economic environment. Conditions for travel-related sectors continue to remain challenging," the ministry said.
"There remains significant uncertainty over the length and severity of the COVID-19 outbreak, as well as the global economy’s trajectory of recovery," it added.
Manpower Minister Josephine Teo said that it is “very encouraging" local employment managed to grow.
"(The) the collective efforts of employers and employees, resumption of activities, plus job-matching - I think all these contributed to employment expanding among locals," said Mrs Teo.
And though the jobless rate went up, the fact that employment also grew offers “some hope".
“It means that people are joining the search, but also people are getting the work," she said at a press conference on the labour market update on Friday.
However, she cautioned against assuming that the local employment rebound would be sustained going forward.
Mrs Teo said that while the tail end of the year usually sees a spike in employment due to travel demands and shoppers buying for the holidays, travel remains muted and consumers are likely to tighten their belts this year. Some companies may retrench if they need to rework their business model in the medium-term, she added.
READ: COVID-19 downturn to be more prolonged than past recessions, slow recovery for jobs market: MAS
The Monetary Authority of Singapore cautioned on Wednesday that while the local jobless rate is likely to bottom out at the end of this year, it is likely to stay elevated in 2021 as recovery will remain sluggish.