SINGAPORE: The labour market continued to improve in the second quarter of 2022, with total employment reaching 99.5 per cent of the level in December 2019, before the COVID-19 pandemic, said the Ministry of Manpower's (MOM) Labour Market Report on Wednesday (Sep 14).
Resident employment grew to 4.2 per cent above the pre-pandemic level in June. While non-resident employment remained 10 per cent below the pre-pandemic level, it increased significantly from the first quarter of the year following the relaxation of border restrictions.
However, the external demand outlook has weakened, given the economic slowdown. Global headwinds, such as the war in Ukraine, inflationary pressures, geopolitical tensions in the region, and the trajectory of the COVID-19 pandemic, mean that the labour market outlook is uneven across sectors, said MOM.
"The labour market continued to make significant improvements in 2Q 2022 as Singapore recovers from the effects of the COVID-19 pandemic; however, there is heightened economic uncertainty ahead," said the ministry.
MOM permanent secretary Ng Chee Khern said that the job market remains tight but there are early signs of easing as recruitment has picked up.
"Amidst this uncertainty, we do need to press on with economic transformation and to enhance our businesses' and workers' resilience to shocks," said Mr Ng.
"Businesses could strengthen their Singaporean core through reskilling and offering flexible work arrangements to tap on more workforce segments such as older workers and caregivers."
Tourism and aviation sectors are expected to continue to benefit from a strong recovery in air passengers and international visitor arrivals.
Demand in consumer-facing sectors, such as food and beverages services, should also remain robust with the easing of domestic and border restrictions, said MOM.
But growth in outward-oriented sectors like finance and insurance services is expected to slow due to the global headwinds.
While non-resident employment is expected to rise further as it catches up to pre-pandemic levels, resident employment growth is likely to be more "subdued", said MOM.
The ministry added that the ratio of job vacancies to unemployed people remains high and edged up from 2.42 in March to 2.53 in June. This is despite the number of job vacancies dipping slightly to 126,100 in June, after seven quarters of increases.
Responding to a reporter's question about whether the labour market tightness will persist, Mr Ng warned that one should "be careful what you ask for" and pointed out retrenchment exercises - giving the example of Food Panda - that made the news recently.
With the US Federal Reserve raising interest rates, many people are expecting a recession in the United States, he said.
"The labour demand would ease sooner than you think and it may not necessarily be a good situation," said Mr Ng.
The growth in total employment in the first half, by 108,500 workers, was in large part due to foreign workers returning to Singapore, particularly in construction and manufacturing.
MOM said that non-resident employment rose across all pass types, with the bulk coming from work permit and other work passes, of which there were 80,900 more. There were 7,400 more S Pass holders and 7,100 more employment pass holders.
Resident employment also grew in the first half of the year, by 13,100, with the largest increases recorded in financial and insurance services, information and communications, and professional services.
Unemployment rates in July held steady at pre-pandemic levels of 2.1 per cent overall. Resident unemployment rate was at 2.9 per cent, and the citizen unemployment rate was 3 per cent.
The resident long-term unemployment rate declined for the third consecutive quarter, returning to the pre-pandemic average of 0.7 per cent in June.
RECORD LOW RETRENCHMENTS
Retrenchments fell to a record low, from 1,320 in the first quarter to 990 in the second quarter. The incidence of retrenchment also improved, from 0.6 per 1,000 employees to 0.5.
Among retrenched residents, the percentage who found work within six months after retrenchment fell from last quarter’s high – from 72 per cent to 66 per cent – but remained higher than the same period a year ago.
The number of employees placed on short work-week or temporary layoff declined from 670 in the first quarter of the year to 590 in the second quarter. The majority of these employees were placed on short work-week arrangements, with 20 laid off temporarily.
The Labour Market Report also showed that the recruitment rate rose to 2.6 per cent from 2.5 per cent in the previous quarter, while the resignation rate held steady at 1.7 percent.
The bulk of the job vacancies in June 2022 were from the construction and manufacturing sectors at 22 per cent. The growth sectors of information & communications, financial & insurance services, professional services and health & social services accounted for 31 per cent of vacancies.
For two sectors - information & communications and financial & insurance services - job vacancies have eased slightly from the highs of March this year, after trending up for five quarters. But job vacancies continued to rise in the professional services sector. The report highlighted the sector's positive outlook due to easing travel restrictions facilitating businesses’ overseas client engagements.
Another 17 per cent of the vacancies in June came from the consumer and tourism-related sectors of arts, entertainment & recreation, F&B services, accommodation, retail and air transport & supporting services.
Job vacancies in these rose at a faster pace, with increased demand for clerical, sales & service workers to meet greater business demand.