Labour Market, Second Quarter 2007
The Strong Labour Market Performance Last Year has Continued into the First Half of this Year
With sustained strong economic growth, employment creation hit an unprecedented high. At the same time, there was a significant fall in unemployment. Labour cost pressures continued to rise but at a more moderated pace as productivity improved slightly, after declining in the preceding two quarters.
2. Total employment grew by an all-time quarterly high of 64,400 in Q2 07, surpassing the increase of 49,400 in Q1 07 and 36,400 in Q2 06. This brought employment growth in the first half of 2007 to 113,800, compared with 81,500 in the same period last year.
3. With the robust employment gains, the seasonally adjusted overall unemployment rate declined significantly to 2.3% in Jun 07 from 2.9% in Mar 07. The resident unemployment rate also fell to 3.1% from 4.0% over the same period. An estimated 76,100 (or 60,200 after seasonal adjustment) residents were unemployed in Jun 07.
4. Fewer residents had been looking for work for 25 weeks or more in Jun 07. Numbering 12,100 or 16% of the unemployed residents, the number and share of the long-term unemployed came down from 16,600 or 20% a year ago. They formed 0.6% of the resident labour force, less than 0.9% a year ago.
5. The number of retrenched workers fell to a low of 1,918 in Q2 07. This was marginally below the 1,964 retrenched in Q1 07 and significantly lower than the 3,263 laid off in Q2 06. Among the residents retrenched from the private sector in Q1 07, CPF records showed that 70% of them were re-employed by Jun 07 (i.e. within 6 months after retrenchment). This was a substantial improvement from 59% in Mar 07 and also higher than 69% in Jun 06.
6. Continuing the upward trend, the number of job vacancies rose to 37,400 in Jun 07, which was 16% more than a quarter ago (32,200)2. On a year-on-year basis, the openings registered a gain of 18%.
7. Wages continued to rise amid the tightening of the labour market. Average (mean) monthly earnings based on CPF records rose by 8.5% over the year in Q2 07, up from 5.5% growth in the previous quarter. After adjusting for inflation, real earnings increased by 7.5% and 5.0% respectively. The increase was the highest registered since the last economic boom in 2000 when earnings rose by 8.9% on nominal and 7.5% in real terms.
8. With the robust output growth slightly outpacing the strong employment expansion, labour productivity rose marginally by 0.4% over the year in Q2 07. This ended the decline in productivity recorded in the two preceding quarters (-1.3% in Q1 07 and -0.7% in Q4 06). The improvement in productivity helped to moderate the increase in overall unit labour cost (ULC) to 5.7% over the year in Q2 07, after a 5.9% increase in the previous quarter. In the manufacturing sector, the ULC rose by 3.1%, significantly lower than 7.1% increase in Q1 07.
9. In summary, the strong labour market performance last year has continued into the first half of this year. Employment gains continued to be robust. Unemployment fell sharply. Retrenchments also fell and re-employment improved. As the labour market tightened, wage gains continued to accelerate. Consequently, cost pressures continued to rise but at a more moderated pace as productivity improved slightly after declining in the preceding two quarters.
For More Information
The report is available online on the Ministry of Manpower's
website.