Labour Market Report First Quarter 2020
Overview
1. The Ministry of Manpower (MOM) reported the early effects of COVID-19 on the labour market in 1Q 2020 based on preliminary data on employment, unemployment and retrenchment in the Labour Market Advance Release (LMAR) on 29 April 2020. The findings are similar in the latest report, based on final data and additional indicators released. Total employment (excluding foreign domestic workers (FDW)) registered its sharpest quarterly contraction on record, and unemployment rates and retrenchments rose. Based on new data, there were also significantly more employees placed on short work-week or temporary layoff. Average paid hours worked, including overtime hours, have also declined. Job vacancies continued to decline after a brief uptick last quarter.
Main Findings
Total employment contracted sharply due to a significant fall in foreign employment
2. Total employment (excluding FDW) fell by 25,6001 in 1Q 2020, the sharpest quarterly contraction on record due to a significant fall in foreign employment. However, based on final data, local employment also contracted slightly2, as sharper than expected declines in trade and tourism-related sectors outweighed increases in Financial & Insurance Services, Public Administration & Education and Professional Services.
Unemployment rates rose, while resident long-term unemployment rate remained unchanged
3. The seasonally adjusted unemployment rates rose from December 2019 to March 2020 (Overall: from 2.3% to 2.4%; Resident: from 3.2% to 3.3%; Citizen: from 3.3% to 3.5%), but remained lower than the previous highs during SARS and the Global Financial Crisis. The seasonally adjusted resident long-term unemployment rate (LTUR) remained unchanged from December 2019 to March 2020 (0.9%).
Retrenchments rose but remain lower than in previous downturns; the re-entry rate among retrenched residents dipped
4. With job and wage support measures to encourage employers to retain workers and retrench only as a last resort, retrenchments in 1Q 2020 (3,220)3 were significantly lower than the peak during the Global Financial Crisis (1Q 2009: 12,760) and were similar to a year ago (3,230). However, layoffs rose from 4Q 2019 (2,670), largely due to sectoral downturn or poor business. Sectors with the largest quarterly increase include Retail Trade, Accommodation and Food & Beverage Services.
5. The six-month re-entry rate among retrenched residents also saw broad-based declines from 4Q 2019 (66%) to 1Q 2020 (64%).
More employees placed on short work-week or temporary layoff, and paid hours of work fell
6. In 1Q 2020, 4,190 employees were placed on short work-week or temporary layoff. This was a fivefold increase compared to the previous quarter (4Q 2019: 840), but still below the high registered during the Global Financial Crisis (1Q 2009: 26,530).
7. Average paid hours of work also fell over the quarter in March 2020 (from 44.7 to 44.4 hours), with the biggest fall seen in Accommodation.
Demand for labour eased as job vacancies declined in some sectors
8. The seasonally-adjusted number of job vacancies (46,300) declined to its lowest since September 2010 (44,900). Declines over the quarter were most notable in Food & Beverage Services and Arts, Entertainment & Recreation. Coupled with a rise in unemployed persons, the seasonally-adjusted ratio of job vacancies to unemployed persons fell to a decade low of 0.71 in March 2020, but was still above the troughs during SARS and the Global Financial Crisis.
9. On the other hand, vacancies rose slightly in sectors such as Electronics Manufacturing, Information & Communications, Health & Social Services, and Wholesale Trade, and also remained firm in other sectors such as Public Administration & Education and Financial Services.
Conclusion
10. The government has put in place significant measures under the Unity, Resilience, Solidarity and Fortitude Budgets to mitigate the impact of COVID-19 on the labour market. These measures may have helped to cushion the overall impact, especially on local workers, as unemployment rates and retrenchments remain lower than in previous downturns. However, labour market conditions are likely to worsen in the upcoming quarter, given the sharp fall in hiring demand globally as well as in Singapore due to circuit breaker measures. This is reflected in the decline in the ratio of job vacancies to unemployed persons.
11. The National Jobs Council has recently been formed to identify and develop job opportunities and skills training for Singaporeans amidst the COVID-19 situation. The Council will oversee the design and implementation of the SGUnited Jobs and Skills Package announced in the Fortitude Budget. This package aims to create close to 100,000 jobs, traineeship and skills training opportunities, to meet the immediate needs of workers, and prepare them for the future when the economy picks up.
12. Jobseekers who require employment assistance can approach Workforce Singapore’s (WSG) Careers Connect and NTUC’s Employment and Employability Institute career centres. Jobseekers can also tap on WSG’s wide range of digital services or call WSG’s hotline.
For More Information
13. The “Labour Market Report, First Quarter 2020” is released by the Manpower Research and Statistics Department, Ministry of Manpower. The report and technical notes on the various indicators are available at https://stats.mom.gov.sg/Pages/Home.aspx.