Singapore’s total employment grows in Q3 but job market shows signs of slowing momentum: MOM
Unemployment rates inched up from a six-year low while retrenchments rose to 1,600 from the previous quarter’s all-time low of 830.
SINGAPORE: Singapore's labour market continued to improve in the third quarter of 2022, with total employment - excluding migrant domestic workers - growing by 75,600.
This surpasses the previous quarter's growth of 66,500.
"With this expansion, total employment surpassed its pre-pandemic level by 1.7 per cent in September 2022," said the Ministry of Manpower (MOM) in its advance estimates on Friday (Oct 28).
Non-residents accounted for most of the expansion, mainly in construction and manufacturing.
More residents also found employment, although the pace of increase has eased, noted MOM.
But unemployment rates and retrenchments rose in the third quarter. The number of retrenchments increased to 1,600 from the previous quarter’s all-time low of 830.
While the removal of COVID-19 restrictions and border measures have supported the labour market's recovery in recent quarters, there are signs of slowing momentum in the third quarter, said MOM.
"In the coming months, a deteriorating global economic environment, higher global inflation, as well as geopolitical tensions, will impact the labour market," it added.
Non-resident employment grew steadily across all sectors, with the increases concentrated in the construction and manufacturing sectors which are more reliant on foreign workers.
More were also hired in the accommodation sector amid heightened demand for manpower resulting from the easing of COVID-19 restrictions.
As for resident employment, increases were led by the outward-oriented sectors of information &
communications, professional services and financial services.
But "sustained declines" were observed in administrative & support services, said MOM, partly reflecting the gradual scale-back of COVID-related roles such as safe-distancing ambassadors and vaccination centre workers.
"In the final quarter of 2022, some unevenness in growth could emerge across sectors," the ministry said in its report.
"Demand in tourism- and consumer-related sectors should remain robust, supported by the recovery of international visitor arrivals and hiring for the year-end festive season. In contrast, trade-reliant sectors such as manufacturing may experience more subdued employment growth as external demand weakens."
After falling to a six-year low in August, unemployment rates edged up slightly in September to 2 per cent overall, 2.9 per cent for residents and 3.1 per cent for citizens.
"However, the rates remained within the pre-COVID range," said MOM.
While retrenchments also increased, the figure remains lower than the pre-pandemic quarterly average.
Layoffs in the third quarter were from services, primarily due to business reorganisation or restructuring, as well as manufacturing as a result of the discontinuation of product lines, said MOM.
It noted that the manufacturing sector has been facing increasing headwinds amid the global slowdown.
"Firms may also be restructuring business operations and laying off employees in anticipation of a weakened global economy, against the backdrop of high inflation, tighter central bank monetary policies and geopolitical uncertainties," said the ministry.
It added that based on polls on firms' hiring and wages sentiment, companies remain optimistic about hiring.
"This will further support employment growth in the final quarter of 2022, as employers hire more actively for the year-end festive season," said MOM.
"The proportion of firms intending to raise wages in the next three months has also held steady at
about one in four, indicating that firms remain prudent about raising wages. The risk of a wage-price spiral hence remains low for now."
NTUC assistant secretary-general Patrick Tay said that despite a fairly good labour market report compared with a year ago, there remains "significant uncertainty" over the global economy's trajectory of recovery.
There are also various risk factors locally and globally, such as high inflation, energy prices, cost of living, geopolitical and global economic uncertainties.
"Notwithstanding, I am cautiously optimistic that both the retrenchment and unemployment figures for the rest of 2022 will remain low and the biggest challenge from the figures and in-demand jobs is the need to overcome the structural unemployment problem," he said in a Facebook post.
He noted that MOM's comment on the wage-price spiral and companies' intention to raise wages comes on the back of various pronouncements such as the "great resignation", "great reshuffling", and "quiet quitting".
Mr Tay added: "I guess this comes at a time to allay fears and concerns over wage-price spiral in the economy and to reassure the market that this may not be out of control especially as companies and businesses react to what’s happening globally and the relatively mixed and uncertain outlook for 2023.
"I also expect tripartite partners would want wages to rise in tandem with productivity."
In his post, Mr Tay also said that he expects the ratio of job vacancies to unemployed persons to continue to remain high, with tight labour market conditions pervading for the rest of the year.
He added that he is "cautiously optimistic" that both the retrenchment and unemployment figures for the rest of 2022 will remain low.