MOM: Retrenchments at 6-year low
Full-year estimates showed that labour market improved in 2018, with workforce growing by 39,300
More people in Singapore, including foreigners, were working last year as the labour market improved, but observers said the year ahead may be challenging.
The latest full-year estimates released by the Manpower Ministry (MOM) yesterday show that unemployment fell in 2018 and retrenchments dropped to a six-year low.
This is despite economic growth easing slightly from 2017. Preliminary estimates put growth at 3.3 per cent last year, down from 3.6 per cent in 2017.
MOM data showed that the typical Singaporean in full-time work earned more last year, with median income - including employer contributions to the Central Provident Fund - rising 3.3 per cent year on year to $4,183 as of June.
But the pace of growth slowed from the 5.9 per cent seen in 2017.
DBS economist Irvin Seah said the slower income growth is consistent with the slower pace of economic growth, and both are expected to be lower this year as well.
MOM noted in its report that year-on-year income changes are prone to fluctuations because data is captured from a sample survey.
Real median income actually grew over the last five years, at an average of 3.6 per cent per year, higher than the 1.7 per cent per year in the previous five years.
Over the same period, real income of Singaporeans at the 20th percentile - those earning lower wages - grew at an even faster pace, at an average of 4.3 per cent a year.
In terms of employment, the workforce grew by 39,300 last year, excluding foreign domestic workers.
Of these additional workers, 28,400 were Singaporeans or permanent residents, while 10,900 were foreigners.
The ministry said the increase last year was driven by the service sector, with more residents employed in industries such as community, social and personal services and information and communications.
The number of workers in construction and manufacturing fell for the third and fifth consecutive year, respectively.
CIMB Private Banking economist Song Seng Wun said the growth in the service sector was due to improving external demand in the first half of 2018.
"But I expect hiring this year to be more selective as businesses watch their costs amid the uncertain environment."
The annual average unemployment rate fell to 2.1 per cent last year from 2.2 per cent in 2017. The rates were 3 per cent for Singaporeans and 2.9 per cent for residents, down from 3.3 per cent and 3.1 per cent, respectively.
Fewer workers were laid off last year as the economy continued to expand. A total of 11,020 workers were retrenched in 2018, down from 14,720 in 2017 and a peak of 19,170 in 2016.
However, MOM noted in a statement that labour market trends from September to December last year were mixed, with a slight uptick in unemployment rates compared with the third quarter of 2018.
It expects local workforce growth to remain modest going forward.
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