Labour Market, 2006: Total Employment Creation for 2006 an All-Time High
The strong economy generated record employment gains which led to an improvement in the unemployment rate to an eight-year low in 2006. Total employment creation for the whole of 2006 rose to an all-time high of 176,000, surpassing the previous year's gains of 113,300. This brought the total number employed to 2,495,900 persons as at December 06.
2. The seasonally adjusted overall unemployment rate was 2.6% in December 06, a slight decline from 2.7% in September 06. Despite the recent increase in resident labour supply1, the resident unemployment rate held steady at 3.6% (seasonally adjusted) since June 06, but is slightly higher than 3.4% in December 05. An estimated 69,600 residents were unemployed in December 06. The seasonally adjusted figure was 68,600.
3. For the whole year of 2006, unemployment averaged 2.7% (overall) and 3.6% (resident), a significant improvement from 3.1% (overall) and 4.1% (resident) in 2005 and the high of 4.0% (overall) and 5.2% (resident) experienced during the economic slowdown in 2003. The last time that unemployment was lower was in 1998. On average, 67,500 residents were unemployed in 2006, down from 74,900 in 2005 and the high of 91,200 in 2003.
4. Slightly over one fifth (22% or 15,100) of unemployed residents had been looking for work for at least 25 weeks, resulting in a long-term unemployment rate of 0.8% in December 06. While this is slightly higher than 0.7% in December 05, the long-term unemployment rate is significantly lower than the 1.2 to 1.5% recorded in 2001 to 2004 for December periods.
5. Private sector establishments, each with at least 25 employees, laid-off 12,359 workers in 2006. While this exceeded the 10,294 laid-off in 2005, it is only about half the number retrenched in 2001 (25,838). Among retrenched residents, an average of 66% secured re-employment within 6 months after retrenchment in 2006. This is the highest registered in the post-Asian crisis period and significantly above the 61% in 2005.
6. Buoyed by sustained economic growth, the private sector registered 28,400 job openings in December 06, a considerable jump of 43% from a year ago (19,800)2. This also marked an increase of 10% over the quarter (25,700), contrary to the usual seasonal decline in vacancies expected at the end of the year.
7. Labour productivity rose by 1.2% in 2006, down from 2.1% in 2005. The moderation was due to stronger employment creation compared to the previous year, as employers expanded their headcount to cope with current and anticipated increase in output. Following the moderation in productivity gains, the overall unit labour cost (ULC) fell by a smaller 0.5% in 2006 than the 1.4% drop a year ago.
8. In summary, the sustained economic growth has led to record high job creation and a reduction in the unemployment rate to an eight-year low in 2006. While productivity still grew, the gains continued to moderate for the second consecutive year.
For More Information
9. The report is available online on the Ministry of Manpower's website.
1 The resident labour supply is estimated to have risen by 96,300 in 2006, up from 51,200 in 2005 and an average of 32,900 per year from 2000 to 2004.
2 Data pertain to private sector establishments each with at least 25 employees.