Retrenchments fell to a five-year low, promising market for job seekers: MOM Q1 labour market report

SINGAPORE — In a sign of things continuing to improve in the job market, the number of retrenchments has dipped to a five-year-low in the first quarter of this year. And for the first time since March 2016, there were more job openings than unemployed persons.

Releasing its labour market report for first quarter of 2018 on Wednesday (June 13), the Manpower Ministry’s (MOM) data showed that there were 2,320 retrenchments in the first quarter of this year — the lowest since the first quarter of 2013, which saw 2,120 retrenchments.

Retrenchments were also lower than the previous quarter — which saw 3,680 retrenchments — and compared to the same period last year, which was more than 1.5 times more at 4,000.

Business restructuring and reorganisation continued to be the top reasons behind the retrenchments in the first quarter of 2018. However, the decline in retrenchments were "broad-based" across various industries, with majority coming from the services industry at 63 per cent — ranging from those in whole sale trade, financial services and professional services.

The overall seasonally adjusted unemployment rate also fell, coming down from 2.1 per cent last December to 2 per cent in March this year.

The resident unemployment rate also fell from 3 per cent to 2.8 per cent in the same period quarter-on-quarter, while citizen unemployment rate remained constant at 3 per cent.

In terms of total employment, the figure grew by 3,700 in the first quarter of 2018, or by 400, if foreign domestic workers are excluded. This total employment growth is due to an increase in services — such as community, social and personal services, financial and insurance services, transportation and storage and information and communications.

This growth in services "more than offsets" the decline in manufacturing and construction, which mainly affected work permit holders, said the MOM.

The latest report also may spell good news for the job hunters.

For the first time since March 2016, the ratio of job vacancies to unemployed persons rose to above 1 — with the seasonally adjusted job vacancies increasing from 49,700 in December last year to 53,900 in March this year. This means, there were more jobs than there were unemployed persons.

This surge in job vacancies was driven by the professionals, managers, executives and technicians (PMET) sector, with the largest increase openings in the information and communications field (1,200), electronics (900), professional services (800) and financial and insurance services (800). There were also more non-PMET openings in the transportation and storage sector, as well as community, social and personal services.

With fewer unemployed persons over the quarter, the seasonally adjusted ratio of job vacancies to unemployed persons improved from 92 job vacancies per 100 jobseekers in December 2017 to 104 in March this year.

This year, things are set to be more promising for job seekers, with the overall labour demand "expected to expand", said MOM, which listed out the potential job opportunities to be found in service sectors such as in finance and insurance, infocomms and media, healthcare, professional services, logistics and wholesale trade.

However, these opportunities will be spread out "unevenly across sectors", and the MOM said that employers in the construction and marine shipyard sector might be more cautious about hiring.

It reiterated that with the resident unemployment rate declining to the lowest level since March 2016, "further improvements will be harder to attain".

"To keep unemployment low, it is critical to prepare workers and businesses to be agile and responsive to economic restructuring and the evolving employment landscape," said the MOM.

Together with Workforce Singapore, it will support workers in upgrading their skillsets for new opportunities through the Adapt and Grow initiative, while helping businesses to innovate and transform through other schemes.

Commenting on the report in a Facebook post, Mr Patrick Tay, assistant secretary-general of the National Trade Unions Congress (NTUC), said while he expects retrenchment to remain low for the first half of this year, there will still be “pockets of layoffs” due to reorganisation, restructuring and restrategisation amid technological and digital disruption, alongside the rise of “cloud, machine and crowd”.

Structural challenges, such as skills and jobs mismatches will remain among the main causes of unemployment in the near and medium term, he added.

Still, he said with the “right mindset, right skillset and right toolset”, Singaporeans will be able to navigate the wave of change and growth, with support from the labour movement and its tripartite partners.