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Unemployment, layoffs among Singaporeans, PRs rise in Q2

SINGAPORE — As the Republic continues to face economic headwinds, unemployment among Singaporeans and permanent residents (PRs) crept up in the second quarter of this year compared with the first, and layoffs continued their rise to hit the highest quarterly figure since 2009.

Redundancy by sector. Source: Ministry of Manpower

Redundancy by sector. Source: Ministry of Manpower

SINGAPORE — As the Republic continues to face economic headwinds, unemployment among Singaporeans and permanent residents (PRs) crept up in the second quarter of this year compared with the first, and layoffs continued their rise to hit the highest quarterly figure since 2009.

However, economists believe that with economic growth in the second half of 2016 largely expected to be similar to that seen in the first six months, overall unemployment is unlikely to take a sharp turn for the worse for the rest of the year.

Releasing its advance labour-market statistics for the second quarter on Thursday (July 28), the Ministry of Manpower said the unemployment rate for Singaporeans climbed from 2.6 per cent to 3.1 per cent between the end of the first and second quarters of the year.

During the same period, the unemployment rate for residents — which refer to citizens and PRs  — inched up from 2.7 per cent to 3 per cent.

This comes after a decline in unemployment among Singaporeans and PRs in the first quarter, owing to a smaller proportion of youths aged 15 to 24 participating in the labour force.

Overall, the seasonally-adjusted unemployment rate rose to 2.1 per cent in June, from 1.9 per cent in March.

Infographic: MOM (Click to enlarge)

In June, 68,300 Singaporeans and PRs were estimated to have been unemployed, compared with 60,400 three months before.

Meanwhile, the number of layoffs continued to head north in the second quarter of 2016, with about 5,500 workers made redundant. This is a 16.8 per cent increase from the 4,710 workers laid off in the first quarter, and is the highest quarterly number since the second quarter of 2009.

The services sector made up about six in 10 — or 61.8 per cent — of the redundancies, with 3,400 workers laid off, up from 2,530 in the first quarter.  The total number of people employed was also estimated to have risen by 5,500 in the second quarter of this year, but this is markedly lower than the increase of 13,000 seen in the first quarter. Economists interviewed said overall unemployment for the rest of the year is likely to remain stable.

OCBC Bank treasury research and strategy head Selina Ling said the unemployment rate should not deviate too far from 2 per cent. This is because gross domestic product (GDP) growth in the second half of 2016 should remain similar to that of the “sluggish” first half, and restrictions on hiring foreign manpower are unlikely to be lifted in the near term. Singapore’s GDP is forecast to grow between 1 per cent and 3 per cent this year, although the Government is reviewing it amid a lacklustre global outlook.

Ms Ling added: “It’s not a situation where you’ll go into a downturn scenario, where you expect that unemployment is going to pick up quite sharply.”

Agreeing, United Overseas Bank economist Francis Tan said the services sector, which accounts for a large proportion of GDP, is still growing — albeit slowly — noting its 1.7 per cent year-on-year expansion in the second quarter.

“(If there’s) a contraction in the services sector … then I will see the unemployment rate moving up more substantially,” he added.

CIMB Private Bank economist Song Seng Wun said most businesses are still cautious about hiring, and concerns over Britain’s decision to leave the European Union and the spate of terror attacks around the world could continue to weigh on business decisions in the months to come.

Noting the likelihood that services growth this year could be the slowest since the 2008 and 2009 global financial crisis, Mr Song said industries such as logistics, banking and transport have been among the hardest hit.

Mr Tan added that the industries most susceptible to layoffs in the latter half of the year are the “externally oriented” ones, including those in the wholesale trade and oil trading, because of a lack of strong signs of improvement in global trade.

But there are slivers of hope, with some industries possibly driving growth in hiring. Mr Song cited compliance and audit and hospitality as sectors likely to continue recruiting workers, with hospitality showing signs of a turnaround, including growth in visitor arrivals.

Mr Tan said the high-skilled manufacturing sectors have seen hiring demand, which will continue amid the Government’s push in areas such as advanced manufacturing and 3D printing.

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