Vacancies fall but employment growth strongest in 5 years: MOM labour market report 2019

SINGAPORE — Cautious hiring due to business uncertainties meant that there were fewer job vacancies for the whole of last year compared with 2018, the Ministry of Manpower (MOM) said in its labour market report on Thursday (March 12).

However, employment growth last year was 57,000 jobs in net terms, a better showing than 38,300 jobs in 2018, and the strongest growth in five years. Retrenchments stayed low, at 10,690, about the same as the 10,730 retrenchments in 2018.

And the resident re-entry rate — retrenched Singapore residents who returned to work last year — was “one of the things that was quite encouraging last year”, Manpower Minister Josephine Teo told reporters during a briefing on the report.

MOM also said in a statement: “The labour market held up in 2019, but the outlook for 2020 is uncertain against the backdrop of global economic uncertainties and the evolving Covid-19 outbreak.”

Hiring sentiment fell in 2019, as indicated by a drop in the ratio of job vacancies to unemployed persons. A figure of one means there is one job vacancy for every person seeking work. The higher the figure, the better the market for job hunters.

The ratio of 0.84 recorded in December last year was the same as in September but it is the lowest level since mid-2017, and a marked fall from 1.09 in mid-2018.

The report said that the decline was due to a fall in the number of available jobs in the entire economy, with a slide in vacancies in small establishments — private sector firms with fewer than 25 employees — outweighing an increase in larger private firms.

Mrs Teo pointed out that during the Sars (severe acute respiratory syndrome) outbreak in 2003, this seasonally adjusted ratio often fell under 0.5. It had also fallen to 0.53 during the 2008 global financial crisis.

Noting that Covid-19 has most affected certain sectors including retail, tourism, air transport and food services, Mrs Teo said that if Singapore can prevent large-scale job losses, few people will be impacted negatively even if the ratio does not increase by much.

Preserving jobs must be a top priority because if retrenchment rates rise, the labour market will be “very unfavourable”, she said.

Still, the slight rise in the re-entry rate to 65.9 per cent last year was unexpected, she said. She had believed that it would remain at 2018 levels of 64.2 per cent.

EMPLOYMENT GROWTH

Despite economic headwinds, the 57,000 net new jobs last year was an “unexpectedly good” result, Mrs Teo said. The statistic excludes foreign domestic workers, and takes into account job losses as well.

This is higher than the 38,300 employment growth in 2018 across the labour force. This was the largest employment growth in the past five years, MOM’s report stated.

“It was better than most of us could foreseeably expect given the uncertainty,” Mrs Teo said.

How total employment grew:

• 28,300 net new jobs went to Singapore residents in 2019, an increase from 27,400 in 2018.

• Foreign employment growth, excluding construction, fell to 14,900 in 2019 from 16,300 in 2018. A total of 28,700 net new jobs went to foreigners, including foreign workers in the construction sector. All these figures exclude foreign domestic workers.

The sectors that contributed to employment growth:

• The services sector grew by 47,000 workers in 2019, about the same as 2018, and was led by community, social and personal services, professional services, and information and communications.

• The construction sector added 12,500 workers in 2019, which was a first in four years.

• However, manufacturing fell by 2,400 workers in 2019, the sixth consecutive year of decline.

UNEMPLOYMENT RATE

While unemployment rates rose slightly in 2019, they remained in the relatively low range of recent years, the report said. The annual average resident long-term unemployment rate also held steady at 0.7 per cent.

“I think it will be a challenge to keep unemployment at this sort of relatively low ranges. So for the next few months at least, our focus is really to prevent large-scale job losses,” Mrs Teo said.

• The citizen unemployment rate was at 3.3 per cent in 2019, up from 3 per cent in 2018

• The resident unemployment rate (taking in both Singapore citizens and permanent residents) rose to 3.1 per cent in 2019, compared with 2.9 per cent in 2018.

• The overall unemployment rate (which includes residents and foreigners) rose to 2.3 per cent in 2019, compared with 2.1 per cent in 2018.

As of December 2019, an estimated 73,900 residents were unemployed. Out of this, 63,500 Singapore citizens did not have jobs in 2019.

JOB VACANCIES

There were fewer vacancies in December 2019 compared with December 2018, as employers exercised greater caution in hiring due to the uncertain business environment.

The report said that the decline in job vacancies was “broad-based” in 2019:

• There were 3,900 job vacancies lost in production and related sectors, mostly in the construction industry.

• 2,300 vacancies for clerical, sales and service workers were lost, led by administrative and support services, as well as transportation and storage.

• Vacancies for 1,600 professionals, managers, executives and technicians (PMETs) vanished, mainly due to the manufacturing sector.

RETRENCHMENTS AND RE-ENTRY RATE

Business restructuring and reorganisation were the most common reason given for retrenchments — with 68 per cent of firms attributing it as a factor in 2019, up from 46 per cent in 2018.

However, the report also noted a rising trend in retrenchments due to sectoral downturns — 21 per cent of downsizing firms gave it as a reason last year, up from 13 per cent in 2018.

PMETs formed the majority of resident retrenchments at 73.6 per cent, despite seeing a decline from 75.8 per cent in 2018. PMETs form a greater share of the workforce but were now less likely to be retrenched, the report said.

The profile of retrenched residents largely mirrored the proportion of PMETs among employed residents. Most retrenchments occurred in PMET-dominated sectors, the report said.

The sectors that carried out most retrenchments:

• 66 per cent of total retrenchments occurred in the services sector, mainly in wholesale trade, professional services and financial services.

• 26 per cent was in the manufacturing sector, and 8 per cent occurred in the construction sector.

On the flipside, re-entry rates grew in 2019 to 65.9 per cent, a slight increase compared to 64.2 per cent in 2018.

The majority — or 67 per cent — of Singapore residents who re-entered employment ended up in a different industry from their previous job. The exceptions were those retrenched from construction and retail trade jobs, who were more likely to re-enter a similar industry, the report said.

To help boost re-entry rates, Mrs Teo said that MOM is “working hard” to find companies still hiring workers during this time so as to job-match displaced workers into new roles.

She noted that before the Covid-19 outbreak, MOM had launched an exercise to identify all job openings and employers who were hiring in various growth sectors, including healthcare, financial services and manufacturing. Job advertisements were published to let jobseekers know of the areas that are still hiring “so don't give up just yet”, she said.