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Singapore's total employment plunges in Q1, sharpest drop since SARS

Singapore's total employment plunges in Q1, sharpest drop since SARS

A car drives along an otherwise empty road in the financial district of Singapore on Apr 24, 2020. (Photo: Roslan RAHMAN/AFP)

SINGAPORE: Singapore's total employment in the first quarter saw its sharpest drop since the severe acute respiratory syndrome (SARS) outbreak in 2003, according to preliminary estimates released on Wednesday (Apr 29).

Total employment, excluding foreign domestic workers, contracted by 19,900 in the January to March period. This was due to a significant reduction in foreign employment, said the Ministry of Manpower (MOM) in its quarterly update on the labour market.

During the SARS outbreak, total employment fell by 24,000 in the second quarter of 2003.

The first-quarter figures reflect the early impact of COVID-19, the ministry said.

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The manufacturing, construction and services industries saw contractions in employment, with services experiencing the sharpest decline due to the COVID-19 outbreak.

Within the services industry, the food and beverage services, retail trade and accommodation sectors were the most severely affected.

Still, overall local employment grew at a "modest pace", MOM said, with contractions in wholesale and retail trade, F&B and accommodation offset by increases in healthcare, public administration and professional services.

"However, workers who remain in employment may have experienced reductions in working hours or adjustments in their salaries," said the ministry.

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Although the unemployment rate rose, it remains lower than the highs seen during the SARS period as well as the global financial crisis, said the Manpower Ministry.

The overall unemployment rate rose over the quarter in March from 2.3 to 2.4 per cent. Among Singapore citizens, the unemployment rate rose from 3.3 to 3.5 per cent, and among residents, from 3.2 to 3.3 per cent. 

During SARS, the overall unemployment rate was 4.8 per cent in September 2003; during the global financial crisis, it was 3.3 per cent in September 2009.

A total of 3,000 workers were retrenched in the first quarter, up from 2,670 in the previous quarter, but significantly lower than the 12,760 in the first quarter of 2009 during the global financial crisis. 

“With jobs and wage support measures announced in Budgets, and companies encouraged to retain workers and retrench only as a last resort, layoffs did not see a sharp increase in this first quarter,” said the ministry.

Retrenchments rose in the services industry, mainly in retail trade and F&B services, due to the drop in domestic consumption when safe distancing measures were implemented. The tourism-dependent accommodation sector also saw more retrenchments amid a drop in visitor arrivals.

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ION Orchard mall (Photo: Marcus Mark Ramos)


Singapore’s labour market conditions are expected to worsen in the second quarter, given the sharp fall in demand globally as well as in Singapore, said the ministry.

Manpower Minister Josephine Teo noted that much of the first quarter’s contraction came in the second half, after Chinese New Year, when restrictions were placed on travel. 

When February came, the economy began to see sharp contractions, particularly in hospitality and tourism-related sectors, she said during a video call with reporters. 

Mrs Teo also pointed out that the figures have yet to include movements during the “circuit breaker”, which only began in April. 

While local employment is holding up for now, multiple companies have implemented cost-cutting measures such as salary cuts instead of going straight to layoffs, she said. 

Since mid-March, about 3,000 companies – with about 100,000 employees, or 3 per cent, of the workforce – notified MOM that they were taking cost-cutting measures. 

These are companies that have at least 10 employees and have taken “sharp cuts”, she noted. 

Companies with at least 10 employees that intend to cut salaries by 25 per cent or more during the circuit breaker period must inform the Manpower Ministry.

A man wearing a face mask walks in the Raffles Place financial business district in Singapore, Apr 14, 2020. (File photo: AFP/Roslan Rahman)

“There have been quite a lot of discussions between employers and their workers to moderate the wage costs in order to tide through this period,” said Mrs Teo.

But she said that implementing cost-cutting measures such as salary cuts instead of going straight to layoffs “would not be a bad thing” and it is an effort to preserve jobs. 

This came after the Government and labour bodies issued an advisory in March suggesting that employers turn to retrenchments only as the last resort. 

“We’ll continue to look at ways to ensure that the support is there for jobs and for employment,” she said.

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Source: CNA/ic(cy)


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