SINGAPORE: Retrenchments in Singapore rose for the third consecutive quarter though unemployment rates remained low amid robust hiring demand.
According to advance labour market estimates released by the Manpower Ministry (MOM) on Friday (Apr 28), the number of retrenchments continued to grow, hitting 4,000 in the first quarter of 2023 and up from 1,300 and 2,900 in the previous two quarters.
This matched levels last seen in 2016 and 2017, when the average number of retrenchments stood at 4,240.
Top reasons for retrenchments in the first quarter of the year were business reorganisation or restructuring, and downturn in the industry, said MOM.
“Nonetheless, hiring sentiments remained buoyant, with a majority (65 per cent) of polled firms indicating their intention to increase headcount in the next three months,” the ministry added.
“More firms also indicated they intend to raise the wages of their employees.”
Despite the uptick in retrenchments, the overall unemployment rate remained low in March 2023, at 1.8 per cent. Resident and citizen unemployment were at 2.5 per cent and 2.7 per cent respectively.
There were 61,500 unemployed residents in March 2023, of which 54,900 were citizens.
“The share of citizens among unemployed residents is comparable with that of the labour force,” MOM said.
LABOUR MARKET CONTINUES TO EXPAND, BUT MODERATED
Advance estimates also showed that the labour market continued to expand in the first quarter of 2023, though at a more moderate pace than the previous quarter, MOM said.
Total employment – excluding migrant domestic workers – grew by 34,500 during this period, marking the sixth straight quarter of expansion.
“As of March 2023, resident employment growth continued to surpass its pre-pandemic level and non-resident employment grew above its pre-pandemic level for the first time,” the ministry said.
Most of the employment growth in the first quarter of the year came from non-residents, primarily those in the construction industry.
Resident employment saw the largest gains mainly in the public administration and education sectors, as well as financial services.
It was broadly unchanged in others such as manufacturing, information and communication and food and beverage services; while it declined slightly in wholesale trade and retail trade.
The Ministry of Trade and Industry’s advance Gross Domestic Product estimates released earlier this month showed that global headwinds contributed to a slowdown in Singapore’s economy, MOM said.
This will “weigh on labour demand going forward, particularly for outward-oriented sectors”, it added, noting that employment growth will likely ease and be uneven across sectors.
“Amidst greater economic uncertainty, we encourage employers and workers to be proactive in making full use of Government programmes to adapt to the changing environment,” said MOM.
“We encourage employers to invest in business transformation, in order to ensure that their businesses continue to be competitive, and their workers productive.”
The labour market report for the first quarter of 2023 will be released in mid-June.