Retrenchments, unemployment rate rise in Q3 but signs of improvement in labour market

SINGAPORE — The number of retrenchments and the unemployment rate in Singapore continued rising in the third quarter of this year, even though the country reopened its economy in June after halting most economic activities for two months. 

Apart from that, the Ministry of Manpower’s latest labour market report released on Friday (Oct 30) showed some silver linings: Resident employment has started growing and the rise in the unemployment rate has slowed. 

Speaking during a media briefing held via video conferencing, Manpower Minister Josephine Teo said that the third-quarter figures are “a source of relief” given that there was no guarantee that companies will resume hiring once the economy reopened after the circuit breaker in April and May. 

However, she warned that there may be more retrenchments and that the rebound in resident employment in the third quarter may not be sustained in the quarters ahead. 

SLIGHT ‘REPRIEVE’ IN THE THIRD QUARTER 

The MOM report said that slightly more than 9,000 workers were retrenched in the third quarter, higher than the 8,130 in the second quarter — which was when the circuit breaker and movement restrictions were imposed to curb the spread of the Covid-19 pandemic. 

This is also higher than the peak recorded during other recessions, except during the global financial crisis when close to 13,000 were retrenched in the first quarter of 2009. 

While retrenchments rose, it went up at a slower pace than the rate in the second quarter. 

Unemployment rate also increased but at a slower pace in the third quarter, rising between 0.1 and 0.2 percentage points in September compared to 0.3 to 0.4 in previous months. 

Resident employment has risen to 2.34 million in September this year, just slightly below the 2.36 million in December 2019, which was before the Covid-19 outbreak started. 

Mrs Teo said that the growth in employment here was a result of job-matching efforts by the authorities as well as the backfilling of job roles that were shed during the circuit breaker. 

MOM also said in a press release on Friday that resident employment has rebounded with the phased reopening of Singapore’s economy, in particular with the resumption of business activities in the services sector.

This slight “reprieve” in the third quarter, however, requires effort to be sustained and should not be assumed to be a given, Mrs Teo said. 

“We have gotten ourselves to a level where (the) ship is more stabilised, but we need to put in the effort to keep sailing to the destination, which is to bring down unemployment, bring back sustained local employment to where it was previously,” she added. 

LABOUR MARKET STATISTICS AT A GLANCE

Employment

• Number of total jobs lost in third quarter: 26,900 (fewer than the 103,800 jobs lost in the second quarter)

• While resident employment grew, there was a contraction in non-resident employment 

• Construction and manufacturing sectors suffered the biggest cuts

• Employment opportunities picked up in the food-and-beverage sector, as well as community, social and personal services sector

Unemployment rate

• 112,500 unemployed residents in September, of which 97,700 were citizens 

• Overall unemployment rate in September: 3.6 per cent (3.4 per cent in August)

• Resident unemployment rate in September: 4.7 per cent (4.6 per cent in August)

• Citizen unemployment rate in September: 4.9 per cent (4.7 per cent in August) 

• The pace of increase was slower, with the rate increasing between 0.1 and 0.2 percentage points in September

• Previous months saw a 0.3 to 0.4 percentage point increase

Retrenchment

• Number of retrenchments in third quarter: 9,100 (8,130 in second quarter)

• A smaller rise in retrenchments this quarter compared to the almost 5,000 jump in the number of retrenchments in the second quarter

• Retrenchments expected to rise in the air transport, as well as arts, entertainment and recreation sectors

• Construction sector likely to see a decline in retrenchments with more activities resuming in June