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Outlook for S’pore’s job market remains cautious despite improving GDP data: Josephine Teo

SINGAPORE — Despite the Republic’s better-than-expected economic growth in the third quarter, Manpower Minister Josephine Teo says the job market here is still volatile and her outlook for the next few quarters remains cautious.

Manpower Minister Josephine Teo speaking to Decathlon staff at its outlet in Kallang on Monday (Dec 9).

Manpower Minister Josephine Teo speaking to Decathlon staff at its outlet in Kallang on Monday (Dec 9).

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SINGAPORE — Despite the better-than-expected economic growth here in the third quarter, Manpower Minister Josephine Teo says the job market here is still volatile and her outlook for the next few quarters remains cautious.

Singapore’s labour market report for the third quarter ending in September — released on Thursday (Dec 12) — showed that while employment increased and retrenchments stayed low, unemployment rates have inched up. 

This is possibly a result of companies being more cautious about hiring, as seen in the declining number of job vacancies, said Mrs Teo on Monday, ahead of the report’s release.

For every 100 unemployed persons looking for a job, there were only 83 vacancies available in September 2019, compared with 94 vacancies in the previous quarter, based on data from the latest report. 

“The (number of job) vacancies is an indicator that the confidence is still not quite so strong. If the confidence were back then I think vacancies should grow. So I will be quite cautious about it,” she told reporters when asked what the improving economy would mean for the labour market. 

Singapore's economy is starting to show signs of recovery as it grew a surprising 0.5 per cent in the third quarter, exceeding advanced estimates of 0.1 per cent.

Overall, the growth in employment suggests that there is still resilience in Singapore’s labour market, said Mrs Teo, who spoke on the sidelines of a tour of sports retailer Decathlon. 

And while the number of job vacancies tends to fluctuate from quarter to quarter, the quality of jobs is getting better. 

“The trend is very clear. Overall we are creating much better jobs,” she added. 

THIRD-QUARTER LABOUR MARKET DATA

In a press release on Thursday, the Manpower Ministry stated that labour market situation was mixed. Here is a rundown of the data: 

The number of job vacancies has declined:

  • September 2018: 58,800

  • June 2019: 47,700

  • September 2019: 42,200

The ratio of job vacancies to unemployed persons has also declined:

  • June 2019: 0.94

  • September 2019: 0.83

Sectors with highest job vacancies:

  • Community, personal and social services: 10,000

  • Manufacturing: 5,300

  • Financial and insurance services: 4,000

  • Professional services: 3,700

  • Information and communications: 3,600

Contributing to the declining ratio is the fact that the number of people who are unemployed has gone up. 

  • Number of unemployed residents in June 2019: 72,600

  • Number of unemployed residents in September 2019: 74,200

  • Overall unemployment rate in June 2019: 2.2 per cent

  • Overall unemployment rate in September 2019: 2.3 per cent 

Retrenchments have gone up slightly, but remained low.

  • June 2019: 2,320

  • September 2019: 2,430

  • 70 per cent of retrenched workers were from the services sector

  • Business restructuring and reorganisation is the main reason why companies are retrenching

Over 12-month periods however, the number of people who got retrenched has gone down.

  • October 2016 to September 2017: 16,480 were retrenched 

  • October 2017 to September 2018: 11,900 were retrenched

  • October 2018 to September 2019: 10,490 were retrenched

The net employment change — calculated as the difference between the number of new hires and the number who exited employment (excluding foreign domestic workers) — also grew. 

  • September 2018: 16,700 

  • June 2019: 6,200 

  • September 2019: 21,700  

Sectors that contributed the most to net employment growth were:

  • Community, social and personal services: 4,200 

  • Professional services: 3,700 

  • Administrative and support services: 2,600 

  • Information and communications: 2,500 

  • Financial and insurance services: 1,500 

WHY ARE BOTH EMPLOYMENT AND UNEMPLOYMENT RATES RISING?

Addressing the apparent contradiction that there is employment growth yet increasing unemployment rate in Singapore’s labour market, Mrs Teo said on Monday that there can be situations where both employment and unemployment are rising. 

While companies are still hiring and therefore contributing to the growth in employment, job seekers may take a longer time to secure a job due to employers being more cautious and thus causing unemployment rates to go up, she explained. 

In the advance release of the third quarter labour market report in October which showed the same situation of both employment and unemployment rates rising, Mrs Teo said on her Facebook page then that the data suggests that mismatches in the labour market are widening.

“It could be jobseekers not having the skills to access available jobs, or jobs being insufficiently attractive. Closing the gaps requires both jobseekers and employers to be more open and flexible,” she said in October. 

When asked on Monday whether the mismatch still exists, Mrs Teo said that the skills and jobs mismatch will not go away. 

“If we are transforming our economy at a fast enough rate, then the job skills mismatch must actually enlarge, and we must see that as an opportunity.

“The story for Singapore must be that businesses do want to innovate. And when businesses innovate, the job requirements will change. And because we have a good system in place to help people acquire new skills that will make them effective in these new job roles, then the innovation story becomes one where it is possible in Singapore,” she added. 

CORRECTION: An earlier version of this story incorrectly described quarterly employment growth in terms of new hires only. The numbers actually refer to net employment change, which is the difference between the number of new hires and the number who exited employment. We are sorry for the error. 

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Josephine Teo unemployment manpower Jobs

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