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Non-residents make up 9 in 10 of total employment decline from Jan to Sep: MOM labour market report

Non-residents make up 9 in 10 of total employment decline from Jan to Sep: MOM labour market report

Office workers walk around the financial business district in Singapore on Nov 23, 2020. (Photo: AFP/ROSLAN RAHMAN)

SINGAPORE: The total number of people employed here continued to fall in the third quarter but at a significantly slower pace as resident employment rebounded “strongly” to almost pre-pandemic levels. 

Taken together with the faster decline in non-resident employment, foreigners excluding maids made up almost nine in ten of the contraction in total employment for the first nine months of the year, according to data from the Ministry of Manpower (MOM) on Thursday (Dec 17). 

Total employment, excluding foreign domestic workers, contracted by 29,100 over the period between July and September. This is a “significantly” slower pace compared with the decline of 103,800 in the second quarter. 

Around 2.34 million Singaporeans and permanent residents were employed as of September, following a rebound of 43,200 in the third quarter which offset most of the declines in the first half of the year. The resident employment level is now almost on par with that before the COVID-19 pandemic – about 2.35 million locals were employed in September last year. 

READ: New COVID-19 grant to be launched to help lower- to middle-income workers

The rebound reflected “strong” support measures for local employment, including the Jobs Support Scheme and programmes under the SGUnited Jobs and Skills Package, said MOM. 

On the other hand, the contraction in non-resident employment continued in the third quarter – down 72,300 – at a faster pace than the previous two quarters. Construction and manufacturing were among the sectors with the largest declines. 

In all for the first nine months of 2020, non-residents accounted for almost nine in ten of the contraction in total employment. This figure, excluding maids, came up to 139,100. 

The contraction in resident employment was 19,600 over the same period. 

SLOWER INCREASES IN UNEMPLOYMENT, RETRENCHMENTS  

MOM said its preliminary estimates for the third quarter had shown “some signs of improvement” in the labour market. Full data for the quarter showed “similar” trends to its earlier assessment. 

Seasonally adjusted unemployment rates were up in September – hitting 4.9 per cent among citizens, 4.7 per cent among residents and 3.6 per cent overall – but the pace of increase has “slowed markedly”. 

The resident unemployment rate rose by 0.1 percentage point in September, lower than the monthly increase of 0.4 percentage points for July and August respectively. A similar moderation in increase was also observed for the overall and citizen unemployment rates, said MOM. 

READ: Non-PMETs hit harder by unemployment than PMETs during COVID-19 pandemic: Manpower Ministry

But residents in their 40s and 50s, as well as those with secondary education and below, saw relatively larger increases in unemployment rates compared to other age and education groups. 

For the month of October, the unemployment rates were largely similar to September. It inched up by 0.1 percentage point for the resident unemployment rate but remained unchanged for the overall and citizen rates.

When asked why the resident unemployment rate grew even as resident employment increased, MOM’s director of manpower research and statistics Ang Boon Heng said: “It reflects retrenched workers that are out there looking for work and it also reflects that as the economy is improving, as the labour market is improving, more people would want to come back to the labour force to look for work.”

Retrenchments rose at a slower pace in the third quarter.

A total of 9,120 workers were retrenched in the third quarter, compared with 8,130 in the second quarter and 3,220 in the first quarter. The layoffs mainly occurred in the arts, entertainment and recreation, and air transport-related industries. 

Other sectors such as financial services, wholesale trade and food and beverage services saw a decline in retrenchments, MOM said. 

Meanwhile among resident employees, more professionals, managers, executives and technicians (PMETs) were retrenched in the third quarter. The incidence of PMET retrenchment went up to 3.7, from 2.7, per 1,000 PMET employees. 

The rate for non-PMETs retrenchment – at 4.3 per 1,000 non-PMET workers – held steady over the quarter. 

The increase in PMET retrenchments over the third quarter was “due to a change in the composition of retrenching establishments”, said MOM. 

“On the whole, PMETs remained less susceptible to retrenchments compared to non-PMETs,” it added. 

GRADUAL PICK-UP 

Other indicators that point to a “gradual pick-up” in the labour market include much fewer employees being placed on short work week or temporary layoff as business activities resumed and employees returned to work. 

Job vacancies rose for the first time this year to 49,600 in September, up from the decade-low of 42,400 in June. This resulted in an improvement in the job vacancy to unemployed ratio to 0.6 from 0.57 over the quarter. 

The increase came from more PMET positions being made available in sectors such as information and communications, professional services and health and social services. There was also more roles for non-PMETs in construction, administrative and support services, as well as manufacturing. 

READ: Singapore among world's most competitive, pro-business economies, public sector report shows

For the third quarter, a total of 34,240 employees were placed on short work week or temporary layoff, down more than half from the second quarter’s 81,720 on the back of a reduction in the latter. 

The decline in short-work or temporary layoff was more prominent in sectors that previously saw larger increases, such as manufacturing, construction and food and beverage services. It also fell more among non-PMETs, although they still formed the majority (65 per cent) of workers placed on short work week or temporary layoff in the third quarter. 

Other indicators include average paid hours worked which rose from 43.4 hours per week in June to 43.8 hours in September, reflecting higher overtime hours. 

Turning to labour turnover, the MOM report showed the average monthly recruitment and resignation rates rising to 1.6 per cent in the third quarter, up from the all-time lows of 1.1 per cent and 1.2 per cent in the previous three months. 

MOM said this increase is in line with the gradual resumption in hiring and voluntary job change as labour market activity picked up across most industries. The only exception was the security and investigation industry which saw a decline in resignation rate, likely due to strong manpower demand in the sector. 

But compared to a year ago, overall labour turnover remained muted. 

“UNEVEN” PERFORMANCES AMONG SECTORS 

Across sectors, MOM observed an “uneven” labour market improvement in the third quarter. 

“While business activities have progressively resumed, uncertainties in external economic conditions continued to weigh more heavily in some sectors,” the report said. 

Sectors where remote work is more likely or consumer-facing sectors which benefited from the end of the “circuit breaker” saw the most improvements. This included the likes of public administration and education, food and beverage services, health and social services and information and communications. 

Those that saw a “mixed” recovery included construction, which saw an extended period of restrictions and registered continued contraction in total employment. Nonetheless, paid hours worked, as well as job vacancies, rose with the gradual resumption of work. 

IN FOCUS: After COVID-19, where are the Singapore economy, workforce headed?

There was also unevenness in the labour market recovery in outward-oriented sectors, such as manufacturing and wholesale trade. 

Tourism-dependent industries, including accommodation, transportation and storage, as well as arts, entertainment and recreation, saw the least improvements. 

Looking ahead, MOM said uncertainty in the economic environment and weak demand conditions will continue to weigh on the recovery of the local labour market. 

“COVID-19 has also accelerated the pace of business transformation and unlike in cyclical downturns, some jobs may not return. As such, labour market recovery may remain protracted beyond the immediate rebound,” it said.

Mr Aubeck Kam, permanent secretary at MOM, noted that there will still be “considerable uncertainty". 

"The labour market tends to lag developments in GDP (gross domestic product) growth so if the economy recovers, the labour market will likely recover but at a delayed pace," he told reporters at a briefing.

"Because initially, employers will have a lot of excess capacity. Even as demand comes back they are not necessarily needing to go back and hire in large numbers.”

He added that Singapore’s job vacancy to job seeker ratio remains low at below one. 

“So I don’t think one ought to think that the whole battle is already won and we don’t have to worry anymore," said Mr Kam.

Source: CNA/rw

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