Labour Market, Second Quarter 2008

Total employment growth remained strong in the second quarter (71,400) declining slightly from Q1 08 (73,200), but it is still higher than a year ago (64,400).  This brought employment growth in the first half of 2008 to a record 144,600, compared with 113,800 in the same period last year.

2.   Driven by robust building activities, employment in construction rose by a record 22,400 in Q2 08. However, employment growth in the other sectors has moderated from the previous quarter. Services added 38,300 workers, down from the gains of 46,500 in Q1 08, but still slightly higher than 36,800 in Q2 07. Manufacturing posted gains of 10,100, lower than 11,800 in the last quarter and 15,900 in the same quarter a year ago.

3.   Amid the economic uncertainties, the unemployment rate rose for the second consecutive quarter, after improving to pre-Asian crisis levels in the second half of 2007. The overall unemployment rate rose from a seasonally adjusted 1.7% in Dec 07 to 2.0% in Mar 08 and further to 2.3%^p in Jun 08.  The increase for residents was from 2.4% in Dec 07 to 2.9% in Mar 08 and 3.1%^p in Jun 08. The prevailing overall and resident unemployment rates are at the same levels as a year ago in Jun 07. An estimated 77,800^p residents were unemployed in Jun 08. The seasonally adjusted figure was 60,900^p, up 12% from 54,300 in Mar 08, but comparable to the 59,700 in Jun 07.

4.   However, long-term unemployment has declined compared to a year ago. 10,000 or 13%^p of the unemployed residents had been looking for work for at least 25 weeks in Jun 08, down from 12,100 or 16% in Jun 07. They formed 0.5%^p of the resident labour force, compared with 0.6% in Jun 07.

5.   After rising for two consecutive quarters, the number of retrenched workers¹ fell to 1,798 in Q2 08 from 2,274 in Q1 08. The slowdown came from manufacturing, which laid off 1,216 workers compared to 1,724 in the previous quarter. On the other hand, retrenchments in services rose slightly from 543 in Q1 08 to 567 in Q2 08, but they still accounted for a smaller share (32%) of the workers retrenched than the manufacturing sector (68%) in Q2 08.

6.   There were 40,100 job vacancies¹ in Jun 08, after increasing 5.0% over the quarter and 7.1% over the year. These unfilled posts represented 2.5% of manpower demand, unchanged from the preceding two quarters, but was slightly lower than 2.6% in Jun 07. With the rise in job seekers, the seasonally adjusted ratio of job vacancies to unemployed persons fell from 115 job openings for every 100 job seekers in Mar 08 to 87^P per 100 in Jun 08, same as a year ago.

7.   Nominal earnings rose over the year by 3.1% in Q2 08, moderating from the growth of 11% in the previous quarter and 8.5% in Q2 07. After adjusting for higher inflation, real earnings shrank by 4.0% in Q2 08, compared with gains of 3.6% in Q1 08 and 7.5% in Q2 07.

8.   Labour productivity declined further in Q2 08 (-7.5%), following two consecutive quarters of contraction in Q1 08 (-2.7%) and Q4 07 (-3.7%).  Except for wholesale & retail trade (0.5%), labour productivity growth was negative across all industries as the strong pace of employment creation in these sectors outweighed output growth. Following the contraction in productivity, the overall unit labour cost (ULC) rose for the ninth straight quarter, with the increase accelerating to 11% in Q2 08 from 9.6% in Q1 08.

9.   In summary, employment has continued to expand strongly, supported by record gains in construction. Retrenchment has also eased following increases in the preceding two quarters. However, productivity has contracted for the third consecutive quarter, as growth in employment outpaced output growth. Unemployment also rose for the second consecutive quarter amid the economic uncertainties.

For More Information

10.   The report is available online on the Ministry of Manpower's website.

¹ Data pertain to private sector establishments (each with at least 25 employees) and the public sector.