Retrenchments in Singapore fall for second straight quarter
Retrenchments in Singapore fell for the second straight quarter while the hiring outlook improved, according to preliminary first-quarter labour market data released by the Ministry of Manpower (MOM) on April 30.
The data also showed that total employment grew by 4,900 in the January-March quarter, down from 7,500 in the previous quarter. The growth came wholly from Singaporeans and permanent residents (PRs).
At the same time, non-resident employment contracted for the first time since the third quarter of 2021 due to cooling labour demand, mainly in construction as tighter foreign worker quotas kicked in.
Although the growth in total employment dropped, MOM said it was higher than in the previous quarters in 2023 - and comparable to growth in non-recessionary periods.
It also noted that “Nevertheless, applications for higher-skilled non-residents, i.e. Employment Pass holders, have picked up in tandem with improved business expectations.”
Retrenchments in the first quarter fell to 3,000 from 3,460 in the fourth quarter of 2023.
MOM said business reorganisation or restructuring remained the top reason for retrenchments in the first quarter of 2024, as businesses press on with transformation efforts.
It said the Singapore economy is expected to improve in 2024 and “labour demand, which tends to lag economic growth, should strengthen correspondingly.
MOM said its forward-looking polls suggest improved hiring demand, with 50.7 per cent of firms indicating an intention to hire in the next three months. This is up from 47.7 per cent in the previous quarterly survey.
However, wage improvements could slow, as the proportion of firms with an intention to raise wages declined from 32.6 per cent to 26.1 per cent. MOM noted.
MOM said the increase in resident employment was mainly in growth sectors such as financial services, health and social services, as well as public administration and education.
“Employment growth in these sectors outweighed the seasonal declines in retail trade, food and beverage services and accommodation following the end of the festive period,” it noted.
The decline in non-resident employment was mainly found in the construction sector, in which most of the decline was among work permit holders.
MOM noted that employment in the sector fell for the first time since the fourth quarter of 2021, as construction firms adapted to the Jan 1 reduction in the sector’s foreign worker quota.
Smaller declines were also seen in outward-oriented sectors such as manufacturing, and information and communications, it added.
Unemployment rates edged up slightly in March 2024, to 2.1 per cent overall, 3 per cent among residents (citizens and PRs) and 3.1 per cent among Singaporeans.
However, MOM said the figures remained within the range observed during non-recessionary periods.
It also said the increase was not unexpected, noting it had previously highlighted that unemployment rates could edge up amid higher retrenchments in the third and fourth quarters of 2023. Examples of companies that laid off in the fourth quarter included Tiger Beer maker Asia-Pacific Breweries.
“However, we do not expect sustained increases in unemployment rates, given continued labour market tightness,” MOM said.
Finalised data for the quarter is due for release mid-June 2024, and will provide more details like the breakdown of resident and non-resident employment, sectoral breakdowns, number of job vacancies, labour turnover, and reentry rates among retrenched residents.
Get The New Paper on your phone with the free TNP app. Download from the Apple App Store or Google Play Store now