Total employment falls by 19,900 in first quarter, sharpest contraction since Sars: MOM

SINGAPORE — Total employment in Singapore in the first quarter of the year, excluding foreign domestic workers, suffered its sharpest contraction since 2003 as the effects of the Covid-19 outbreak began to take a toll on the economy, based on preliminary data from the Ministry of Manpower (MOM).

The MOM said on Wednesday (April 29) that total employment excluding foreign domestic workers dropped by 19,900 in the first three months of the year, mainly due to a significant reduction in foreign employment.

During the second quarter of 2003, total employment, excluding foreign domestic workers, fell by 24,000 amid the outbreak of the severe acute respiratory syndrome (Sars). Total employment fell 16,000 over the first two quarters of 2009, the year when Singapore felt the effects of the global financial crisis.

In the first quarter of this year, the main sectors which experienced the drop in employment were manufacturing, construction and services, with the services sector experiencing the sharpest decline.

This is as consumer-facing businesses, such as food and beverage outlets, retail trade businesses and tourism-dependent accommodation were most severely affected by the Covid-19 outbreak.

Unemployment rose slightly over the quarter. The overall unemployment rate among all residents rose from 2.3 per cent to 2.4 per cent.

Among Singapore citizens, the unemployment rate increased from 3.3 per cent to 3.5 per cent, while the resident unemployment rate, which includes permanent residents, increased from 3.2 per cent to 3.3 per cent.

These numbers are lower than the highs seen during Sars and the global financial crisis, said MOM. 

However, Minister for Manpower Josephine Teo said that these figures also need to be seen in context.

While the situation appeared normal in January, with businesses gearing up for the Chinese New Year festivities, a sharp contraction could be seen once Singapore rolled into February, said Mrs Teo, who was speaking to the media via video conferencing platform Zoom.

Mrs Teo said sectors such as hospitality, travel and tourism were the first to be affected by the health crisis, due to the lack of tourists coming into Singapore. This later extended to other sectors.

She added that there was a much sharper reduction in foreign employment than local employment, due to the various travel restrictions that were imposed starting from late January.

“Some of (the foreign workers) still have not returned,” she said. “Either (their employers) decided to exercise their own decision not to ask these workers to return, or there are companies who are unable to hire, or have chosen not to do so.” 

The number of people retrenched went up to 3,000 in this quarter, compared with 2,670 in the last quarter of 2019.

But for now, MOM said the numbers still remain significantly lower than the quarterly peak seen during the 2008 and 2009 global financial crisis, when 12,760 jobs were cut.

Retrenchments rose in the services sector and accommodation services dependent on tourism.

While relief measures from the Budget may have helped to cushion the overall impact containment measures have had on Singapore’s economy, MOM said that labour market conditions are likely to worsen in the next quarter.

This is due to a sharp fall in demand globally and in Singapore, as firms here adjust to the circuit breaker measures.

ADDITIONAL REPORTING BY LOW YOUJIN

CORRECTION: In an earlier version of this story, we reported that total employment fell by 19,000. It fell by 19,900. We are sorry for the error.