Resident long-term jobless rate creeps up despite fewer workers laid off

SINGAPORE — With economic growth still uneven, the Ministry of Manpower's (MOM) latest labour market report for the first three months of the year was a mixed bag.

The report, which was released Tuesday (June 13), showed that while jobseekers continued to outnumber the openings available in March, the situation has turned around after seven straight quarters of declines.

Fewer workers were laid off. However, the resident long-term unemployment rate - which covers citizens and permanent residents jobless for at least 25 weeks - crept up to 0.8 per cent, from 0.7 per cent a year ago.

Meanwhile, the total number of people in employment shrank the most over a quarter in nearly eight years, reflecting a reduction in the foreign workforce: Total employment fell by 6,800 in the first quarter, reversing the modest growth of 2,300 in the fourth quarter of last year. This was the largest quarterly decline since the second quarter of 2009.

The MOM said the fall was due mainly to a drop in work-permit holders in the manufacturing and construction sectors, as a result of low oil prices and the continued weakness in private-sector construction activity, respectively. "At the same time, employment continued to grow in sectors such as community, social and personal services, and financial and insurance services," it added.

The report showed that, seasonally adjusted, there were 81 vacancies for every 100 jobseekers at the end of the first quarter. This was an improvement over the 77 openings for every 100 jobseekers at the end of the fourth quarter of last year. This uptick came as the total number of vacancies for the economy rose at the end of the first quarter, buoyed by an increase in seasonally adjusted vacancies among small private-sector establishments hiring fewer than 25 employees. Such vacancies were estimated to have grown 29 per cent from 15,500 to 20,000 between the fourth quarter of last year and the first quarter of this year.

This offsets a dip in openings among private-sector firms with at least 25 employees, as well as the public sector over the same period - from 47,400 to 46,800. Overall, vacancies were concentrated in the services sector.

Seasonally adjusted, the unemployment rate stayed unchanged: Citizens and PRs (3.2 per cent), and citizens (3.5 per cent). The long-term unemployment rate among residents below 30 years old rose from 0.5 to 0.9 per cent, and from 0.8 to 0.9 per cent for those aged 50 and above. In the first three months of the year, 4,000 workers were made redundant, fewer than the 5,440 workers laid off in the previous quarter and the same period a year ago (4,710). For the whole of last year, 19,170 workers were laid off, 23 per cent higher than the 2015 figure of 15,580.

The MOM said the outlook on the labour market remains uneven across sectors. For example, hiring expectations are still cautious in the construction and marine industries, but sectors such as finance and insurance, information and communications, healthcare and certain segments of manufacturing should continue to support job growth.

Economists interviewed by TODAY noted that economic growth was still patchy, with growth concentrated only in certain sectors.

Mr Francis Tan, an economist with United Overseas Bank, said that while the ratio of job vacancies to jobseekers has improved slightly, it was still too early to tell which the direction it would take. He believed jobseekers would continue to outnumber openings for at least two more quarters, because sectors propping up the economy's growth, such as manufacturing, are "not very large employers".

OCBC Bank treasury research and strategy head Selena Ling said the higher ratio was not unexpected, as geopolitical uncertainties ebbed away: Concerns over the policies of United States President Donald Trump and a potential trade war between the US and China did not come to pass.

Mr Tan said layoffs would likely persist because the economy was still not experiencing "broad-based growth".

Overall, Mizuho Bank economics and strategy head Vishnu Varathan said the labour market was still weak, with the pick-up in hiring within sectors such as finance still not across the board. For instance, while there are bright spots in financial technology and compliance, other areas remain patchy. At best, the labour market could turn around in the later part of next year, when job creation is more evenly distributed to allow for a "more durable" recovery, said Mr Varathan.

This must also go hand-in-hand with a "more emphatic" recovery of the global economy, which is now seeing only tentative signs of it, he added.