The unemployment rate crept up between January and March this year, compared to the previous quarter, even as fewer jobs were created.
According to a Ministry of Manpower (MOM) report yesterday, 27,400 jobs were created in the first quarter of this year, down from 37,600 in the previous quarter and 28,300 in the first three months of last year. Compared to the previous quarter, the unemployment rate increased by 0.1 percentage point to 2.1. Nevertheless, economists Today spoke to said the figures were in line with expectations as the economy slows.
UOB economist Suan Teck Kin said: “The 0.1 percentage point increase (in unemployment rate) should not be alarming at this point, with the labour market near full employment, and far below the recent peak of 3.5 percent during the global financial crisis (between 2008 and 2009).”
UniSIM professor Randolph Tan, who expects the unemployment rate to increase to about 2.5 percent by year-end, added: “There are now signs the much-anticipated slowdown in the labour market is finally here.”
Writing on his blog, Minister of State (Manpower) Tan Chuan-Jin said that with the Government managing the influx of foreign labour, any slight increase in the unemployment rate is “to be expected, as companies restructure, (move) offshore or reduce less productive activities and improve their overall productivity and profitability”. He added: “This is not necessarily bad, as long as unemployment also remains low.”
Mr Tan also noted that with the increase in lay-offs in the fourth quarter of last year, “some of the workers affected could be looking for jobs after taking a break during the festivities, resulting in an increase in the labour supply in the first quarter this year”.
Said Mr Tan: “The good news is that lay-offs have since eased to an estimate of 2,700 workers in (the first quarter), a drop from the 3,250 workers affected in the preceding quarter.”
According to MOM’s seasonally adjusted figures, 64,000 residents – including 57,700 citizens – were unemployed in March. The bulk of the employment gains between January and March continued to come from the services sector, which added 19,800 workers. The number of jobs created in manufacturing fell by 500 – the second consecutive quarter of decline.
On the prospects for this year, Mr Tan said the services sector is expected to continue to lead job creation. He said: “To meet the needs of our ageing population, the healthcare, eldercare and social services will continue to generate demand for healthcare professionals… We envisage that this would be a constant feature in our employment landscape for the years to come.
He added: “Clearly, there will be jobs and good jobs here for Singaporeans who will be the core of our workforce.” However, he noted that growth will not be uniform across all sectors – a point that the economists concurred with.
UniSIM’s Professor Tan said employment prospects will likely diminish for sectors “in the export business, as compared to domestic-oriented sectors like community, personal and social services, which will probably do well if the job market continues to weaken in general”.
Mr Suan said the overall job situation could improve in the second half of the year, but that is contingent on recovery in the eurozone and the United States. -by Ashley Chia