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Layoffs, unemployment rate down in Q2: MOM

SINGAPORE — Layoffs continued to dip in the second quarter of this year — the lowest in seven quarters — and unemployment rate among citizens and residents fell slightly, advance figures released by the Manpower Ministry (MOM) indicate.

SINGAPORE — Layoffs continued to dip in the second quarter of this year — the lowest in seven quarters — and unemployment rate among citizens and residents fell slightly, advance figures released by the Manpower Ministry (MOM) indicate.

However, total employment excluding foreign domestic workers is still declining. It reached 8,400 in the second quarter, lower than the 9,400 in the first.

In a media release on Friday (July 28), MOM warned that the labour market outlook remains uneven across sectors.

Hiring remains cautious in sectors such as construction and marine, it added, but opportunities would continue to be available in finance and insurance, infocomms and media, healthcare, professional services, and wholesale trade — which are the five sectors it recently identified as showing promise in job creation.

Based on preliminary estimates, 3,500 workers were retrenched in the second quarter, fewer than the 4,000 in the first. This is the lowest level since the third quarter of 2015 when it stood at 3,460.

More than six in 10 people laid off in the second quarter of this year were in the services sector, with the rest coming from manufacturing and construction industries.

Seasonally adjusted, the unemployment rate for citizens and permanent residents dropped from 3.2 per cent to 3.1 per cent, while for citizens, it fell from 3.5 per cent to 3.3 per cent.

Despite a slightly upbeat showing, overall unemployment rate remained unchanged for the third straight quarter, ending at 2.2 per cent in June this year, higher than a year ago.

As for the fall in total employment, MOM said that this was mainly due to a drop in work permit holders in the construction and manufacturing industries.

Those hired in the manufacturing sector fell by 2,500. And for the first time since 2004, employment in the construction sector continued to slide for the fourth straight quarter, with the figure standing at 9,500.

This reflected the slowdown in public and private sector construction activities, MOM said.

Reviewing the figures, some economists told TODAY that the drop in layoffs is a “good sign”, and most of them agreed that the labour market is still hampered by the uneven economy and weak performances in the manufacturing and construction sectors.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said that shrinking employment in the constructing and manufacturing sectors suggest that they are still “in a state of flux” as restructuring is ongoing.

Although it would still be acceptable if the overall unemployment rate stays within the 2.0 to 2.5 per cent range, she noted that the key question is whether those retrenched and unemployed — especially professionals, managers, executives and technicians (PMETs) — are able to find new employment and at wages comparable to their previous jobs.

Economist Song Seng Wun, 57, from CIMB Private Banking, highlighted that businesses are still trying to cope with the technological disruption and making adjustments to their operations in a bid to stay in the competition. They are thus more selective of the people they want to hire, he added.

Senior economist Chua Hak Bin, 51, from Maybank Kim Eng, said that some services clusters — such as healthcare, food and beverage, and social services — are still facing difficulty in trying to improve productivity.

And these clusters might struggle to pick up pace given the limits in hiring foreign workers.

“The Government shows no letting-up on foreign worker measures, which is probably also hurting local hiring,” Mr Chua said, explaining that because of limitations in hiring foreign workers, this affects businesses’ manpower capacity, which then affects their expansion plans. This, in turn, has an impact on job openings for resident workers.

Touching on the construction sector’s performance in the second quarter, UOB economist Francis Tan, 40, said that the contraction is mainly due to the lesser volume of projects in the private sector, which is “only half of what we saw in recent years”.

In light of this, Mr Song pointed out that the Government is stepping up efforts to boost the sector, such as bringing forward some of the public sector projects. “This is to ensure a relative degree of activity within the sector and those projects are still worth a lot of money,” he added.

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