Labour Market Advance Release - Second Quarter 2023
Overview
1. Advance estimates showed further signs of cooling of labour demand in 2Q 2023. Total employment (excluding Migrant Domestic Workers) expanded for the seventh consecutive quarter, but at a significantly slower pace compared to previous quarters. At the same time, retrenchments declined after three consecutive quarters of increases, and unemployment rates remained low.
Main Findings1
Total employment continued to expand, albeit at a more moderated pace
2. Total employment (excluding Migrant Domestic Workers) expanded for the seventh consecutive quarter by 23,700 in 2Q 2023, but at a significantly slower pace compared to previous quarters.
3. The employment growth in 2Q 2023 was from non-residents, mainly in Construction2 amidst sustained demand for private and public sector projects, such as housing. Majority of the non-resident employment growth in Construction pertain to Work Permit Holders. Non-residents employed in sectors with higher non-resident employment growth were typically in lower-paying roles3.
4. Resident employment contracted slightly in 2Q 2023, although resident employment still remained well above its pre-pandemic level4. The contraction occurred mainly in Food & Beverage Services (F&B) and Retail Trade, which is not unusual in the first half of the year. F&B and retail outlets typically increase their hiring of temporary staff5 in the fourth quarter to cater for year-end festivities, and reduce their number of staff in subsequent quarters, with the easing of consumer demand.
5. On the other hand, sectors such as Community, Social & Personal Services, Financial Services and Professional Services saw continued resident employment growth, although growth has slowed amid global economic headwinds.
Unemployment rates remained low
6. Unemployment rates did not change in June 2023 (overall: 1.9%; resident: 2.7%; citizen: 2.8%), after edging up in April and May.
Retrenchments declined in 2Q 2023
7. After rising over the past three quarters, the number of retrenchments declined from 3,820 in 1Q 2023 to 3,200 in 2Q 2023, similar to the non-recessionary range observed in 2019 (pre-pandemic)6. Business reorganisation or restructuring was the top reason for retrenchments in 2Q 2023.
8. In 2Q 2023, the Services sector, especially IT Services and Wholesale Trade, was the key contributor to retrenchments. Retrenchments in Manufacturing declined, following larger scale retrenchments in the sector in 1Q 2023 and 4Q 2022. The number of retrenchments in the remaining sectors also declined or stayed broadly stable.
Conclusion
9. Labour market conditions could soften in the coming quarters. The slowdown in total employment growth reflects the moderation in our economic growth in previous quarters as a result of global economic headwinds. Looking ahead, firms appear to be adopting a more cautious stance towards hiring and wage increases. The proportion of firms which indicated an intention to hire in the next three months declined from 64.8% to 58.2%. Similarly, the proportion of firms with intention to raise wages also fell from 38.2% to 28.0%.
10. In the near term, employment growth could ease and be uneven across industries. While tourism-related sectors are expected to see continued improvements in labour market conditions, labour demand in outward-oriented sectors such as Wholesale Trade and Information & Communications would likely dampen.
11. To remain competitive and resilient amidst these global developments, we encourage employers and workers to be proactive in making full use of Government programmes to adapt to the changing environment. We encourage employers to invest in business transformation, in order to ensure that their businesses continue to be competitive, and their workers productive. We remain committed to supporting our workers to find good jobs despite the economic uncertainty ahead.
a. Workforce Singapore (WSG) has several initiatives which can help jobseekers reskill and take on new job roles, such as the Career Conversion Programmes, which allow workers to undergo industry-recognised training with up to 90% salary and course fee support. In addition, the SGUnited Mid-Career Pathways Programme provides attachment opportunities to mature workers, allowing them to gain relevant experience while receiving a training allowance of up to $3,800 per month.
b. Jobseekers who require career matching services or personalised assistance from career coaches can approach WSG and NTUC’s Employment and Employability Institute, including through any of the 24 SGUnited Jobs & Skills Centres across the country.
c. We have also recently launched the CareersFinder beta feature7 on WSG’s MyCareersFuture job portal to help jobseekers find more career and training opportunities. CareersFinder uses data on skills adjacencies and job transitions in the labour market to help jobseekers to identify potential career opportunities, personalised using their individual profiles, and recommend suitable training programmes to help them achieve their career goals.
12. The Labour Market Report Second Quarter 2023, which will be released in mid-September 2023, will provide a comprehensive assessment and more details of the labour market situation in 2Q 2023. This will include the breakdown of resident and non-resident employment8, sectoral breakdowns, number of job vacancies, labour turnover, and re-entry rates among retrenched residents.
For More Information
13. The report is available online on the Ministry of Manpower’s Research and Statistics Department website at stats.mom.gov.sg/.
14. For data requests and queries pertaining to the report, please reach out to the Ministry of Manpower’s Research and Statistics Department at mom_rsd@mom.gov.sg.