Statement on Labour Market Developments in 1H 2019

Introduction

1. Total employment continued to expand in 1H 2019, despite economic headwinds. Resident and citizen unemployment rates inched upwards and the number of job vacancies declined. However, retrenchments remained low and the resident long-term unemployment rate held steady. This suggests that most employers are not laying off existing workers, but are exercising greater caution in hiring. MOM continues to monitor the labour market situation closely.
   
   Review of 1H 2019
   
   Employment
2. Total employment (excluding Foreign Domestic Workers (FDW)) continued to grow, expanding by 16,900 in 1H 2019. This was higher than the employment change in the same period a year ago (1H 2018: 6,900), but lower than the previous half-year (2H 2018: 31,400) which was boosted by seasonal hiring in the 4^th quarter.
   
   Local employment grew but at a slower pace
3. Local employment grew by 5,300 in 1H 2019, albeit at a slower pace compared with the year before (1H 2018: 6,500) (Figure 1). There continued to be growth in sectors such as Community, Social & Personal Services, Professional Services, Financial & Insurance Services, and Information & Communications.
   
   
   
   Foreign employment grew
4. Foreign employment (excluding FDW) grew by 11,600 in 1H 2019, more than the year before (1H 2018: 400) (Figure 1). This was due to sustained growth in Services (1H 2019: 10,300; 1H 2018: 8,100) and the turnaround in Construction (1H 2019: 3,700; 1H 2018: -5,700). Excluding Construction and FDW, foreign employment grew by 7,900 in 1H 2019, compared to 6,000 in 1H 2018. By pass type, foreign employment growth was driven by Work Permit & Other Work Passes (WP+) holders (6,200), and Employment Pass (EP) holders (3,200).
   
   Resident unemployment rate continued to inch upwards, though the long-term unemployment rate held steady
5. The seasonally-adjusted resident unemployment rate rose from 3.0% in March 2019 to 3.1% in June 2019.¹ However, the seasonally-adjusted resident long-term unemployment rate (LTUR) held steady at 0.7% in June 2019.
   
   Retrenchments and Job Vacancies²
   
   The number of retrenchments remained low
6. 5,550 employees were retrenched in 1H 2019, comparable to the number of retrenchments in 1H 2018 (5,350). Restructuring and reorganisation remained the top reason for retrenchments cited by establishments.
7. The six-month re-entry rate into employment of retrenched residents was about two-thirds (63%) in 1H 2019,³ also similar to that in 1H 2018 (63%).
   
   Ratio of job vacancies to unemployed persons declined
8. The seasonally-adjusted number of job vacancies declined from 57,100 in March 2019 to 47,700 in June 2019. As a result, the seasonally-adjusted ratio of job vacancies to unemployed persons dipped to 0.94 in June 2019.
   
   Sectoral Performance and Outlook
   
   Manufacturing
9. Employment in the Manufacturing sector fell by 4,700 in 1H 2019, a larger decline compared with 1H 2018 (-3,900) and a reversal from the increase in 2H 2018 (1,500). The employment decline in the Manufacturing sector came mainly on the back of output declines in the Electronics, Transport Engineering and Precision Engineering clusters.
10. The hiring outlook in the Manufacturing sector is likely to remain cautious as the weak performance of the Electronics and Precision Engineering clusters in 1H 2019 is expected to be sustained for the rest of the year due to the deterioration in the outlook for global semiconductor demand. Nonetheless, within the Manufacturing sector, the Aerospace and Food & Beverage Manufacturing segments are expected to continue doing well on the back of firm demand conditions.
    
    Construction
11. Employment in the Construction sector grew by 2,800 in 1H 2019, a reversal from the declines in 1H 2018 (-6,400) and 2H 2018 (-700). The employment gains came amid a recovery in construction activities.
12. Construction output is likely to see a turnaround this year after three consecutive years of contraction. The recovery in the Construction sector is expected to support employment growth in the sector.
    
    Services
13. Total employment (excluding FDW) in the Services sector grew by 19,000 in 1H 2019, higher than in 1H 2018 (17,100) but lower than in 2H 2018 (30,800). Employment growth was broad-based, driven by the Community, Social & Personal Services, Professional Services, Financial & Insurance Services, and Information & Communications sub-sectors. The employment gains in these sub-sectors more than offset declines seen in the Accommodation, Retail Trade, and Wholesale Trade sub-sectors.
14. Among the Services sectors, employment growth in outward-oriented Services sub-sectors is expected to be supported by the Information & Communications, and Financial & Insurance Services sub-sectors, as value-added (VA) growth in these sectors is expected to remain resilient on the back of the sustained demand for enterprise IT solutions and increased demand for payment processing services respectively. At the same time, employment growth in the domestically-oriented Services sub-sectors is expected to be supported by the Community, Social & Personal Services sub-sector, due to the ramp-up of operations in healthcare facilities.
    
    Labour Market Outlook
15. The Ministry of Trade and Industry (MTI) has downgraded the 2019 GDP growth forecast for the Singapore economy to “0 to 1%” from “1.5 to 2.5%”, with growth expected to come in at around the mid-point of the forecast range. Employment growth in 1H 2019 remained robust in sectors such as Community, Social & Personal Services, Professional Services, Financial & Insurance Services, and Information & Communications. Job opportunities in these sectors will continue to provide support to the labour market.
    
    Conclusion
16. MOM and Workforce Singapore (WSG), together with tripartite partners, are closely monitoring the labour market situation, and stand ready to step up support for Singaporeans under the Adapt and Grow (A&G) initiative.
17. In particular, the Taskforce for Responsible Retrenchment and Employment Facilitation is proactively reaching out to retrenched workers to provide them with timely employment support, including job matching⁴. The Taskforce will also continue to engage retrenching companies on responsible retrenchment practices.
18. We encourage employers to tap on A&G programmes such as the Career Support Programme (CSP) and Career Trial (CT) to access a wider pool of jobseekers to meet their manpower needs. CSP provides salary support for employers who hire long-term unemployed jobseekers or mature retrenched jobseekers in PMET jobs. CT offers an opportunity for employers and jobseekers to try out each other and assess job fit, before making the hiring decision. During the trial, which can be up to three months, jobseekers receive a training allowance from WSG.
19. To help jobseekers re-skill for new opportunities, WSG offers over 100 Professional Conversion Programmes (PCPs) in more than 30 sectors, with training and salary support provided. Jobseekers can also consider taking up Attach-and-Train PCPs, which train workers ahead of hiring demand, in selected sectors with strong growth potential. Jobseekers who need more assistance can visit WSG’s Careers Connect and NTUC-Employment and Employability Institute’s (NTUC-e2i’s) career centres, which provide a suite of employment facilitation services.