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Labour Market Advance Release 4Q 2017

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Overview

  1. In the advance release of the Labour Market Report for 2017 by the Manpower Research and Statistics Department, preliminary data for 4Q 2017 showed that the labour market continued to improve. Resident and citizen unemployment rates declined in December 2017, lower than the previous quarter and a year ago. Retrenchments in 4Q 2017 remained at similar level as 3Q 2017, but was lower than that the year before. As a result, total retrenchments in 2017 were significantly lower than that in 2016. In 2017, total employment declined for the first time since 2003, largely due to a continued decrease in work permit holders in Construction and Marine. Local employment continued to grow, recording nearly double the growth in 2016.

    Main Findings

    4th Quarter 2017

    Unemployment rates declined in December 2017
  2. Preliminary estimates showed that quarter-on-quarter, the seasonally adjusted unemployment rate declined for overall (from 2.2% in September 2017 to 2.1% in December 2017), residents (3.1% to 2.9%) and citizens (3.2% to 3.0%).

    Total employment increased, after contracting in the first three quarters of 2017
  3. Total employment (excluding Foreign Domestic Workers (FDW)) grew in the fourth quarter of 2017 (10,700), after contracting in the first three quarters of the year. The increase was due to larger employment growth in Services from seasonal hiring. Manufacturing and Construction employment continued to contract, but at a slower pace.

    Retrenchments were unchanged over the quarter, and remained lower than a year ago
  4. The number of retrenchments in the fourth quarter of 2017 (3,300) was similar to the previous quarter (3,400), and continued to be lower than the year before (5,440). Retrenchments declined over the quarter in Construction and Services, but rose in Manufacturing.

    Full Year 2017

    While unemployment rates for the whole of 2017 were higher than that in 2016, the overall unemployment situation has shown improvement since June 2017
  5. The annual average unemployment rate for the four quarters of 2017 was higher than that in 2016 for overall (from 2.1% in 2016 to 2.2% in 2017), residents (3.0% to 3.1%) and citizens (3.1% to 3.3%). However as at the end of 2017, the unemployment rate in December 2017 was lower than a year ago for overall (from 2.2% to 2.1%), residents (3.2% to 2.9%) and citizens (3.5% to 3.0%).

    Local employment growth nearly doubled, while foreign employment declined more compared with 2016
  6. In 2017, total employment (excluding FDW) was estimated to have declined by 10,700 (or -0.3%), a first since 2003. This was due to a contraction in foreign employment, even though local employment continued to grow.
  7. Local employment grew by an estimated 21,300 (or 0.9%) in 2017, nearly double the growth in 2016. The increase occurred in most Services sectors, including Community, Social & Personal Services, Financial & Insurance Services, Transportation & Storage and Administrative & Support Services. On the other hand, foreign employment (excluding FDW) continued to decline in 2017 (-32,000 or -2.8%), mainly due to the decrease in Work Permit Holders in Construction and Marine. The foreign employment contraction was also larger compared to that in 2016 (-2,500).

    Retrenchments in 2017 were significantly lower than in 2016
  8. The number of retrenchments for the full year of 2017 (14,340) was significantly lower than in 2016 (19,170). Compared with 2016, the number of layoffs declined in Manufacturing and Services, and remained similar in Construction.

    Higher income growth at the median for Singaporeans
  9. Year-on-year, the nominal median monthly income from work (including employer CPF contributions) of full-time employed citizens increased by 5.9% in June 2017, or 5.3% in real terms (i.e. after adjusting for inflation), higher than the growth in June 2016 (nominal: 0.7%, real: 1.3%). This could reflect the pick-up in economic growth, changing composition of the workforce and continued restructuring of the economy.
  10. Over the last five years from 2012 to 2017, the real income growth at the 20th percentile of full-time employed citizens (4.3% p.a.) was higher than that at the median (3.9% p.a.), supported by initiatives to raise the incomes of low-wage workers in recent years.

    Conclusion
  11. In line with the pick-up in economic growth and continued upgrading of the workforce, growth in local employment and median income of citizens improved in 2017. Local employment is expected to continue to grow in 2018, albeit some unevenness across sectors. Job opportunities remain available in Manufacturing sectors as well as Services sectors such as Infocomms & Media, Finance & Insurance, Healthcare, Professional Services, Logistics and Wholesale Trade. Moving forward, local workforce growth will remain modest due to underlying demographic trends and foreign workforce growth will continue to remain moderated. In this manpower-lean environment, companies are encouraged to keep transforming to remain competitive and at the same time create better quality jobs for Singaporeans.
  12. While unemployment and retrenchments have eased in recent quarters, job-skills mismatch continues to be a growing structural challenge due to on-going economic restructuring and shifts in composition of the resident labour force. The tripartite partners will press on with efforts to support companies through the Lean Enterprise Development Scheme, and help workers to reskill and seize new job opportunities through the SkillsFuture and Adapt and Grow initiative.

    For more information

  13. The report is available on the Ministry of Manpower’s website at http://stats.mom.gov.sg/Pages/Home.aspx