SINGAPORE (June 15): Singapore’s labour market is feeling the weight of the Covid-19 health-turned-economic crisis, as total employment contracted sharply by 25,600 in 1Q20 ended March. The data was revealed in the Ministry of Manpower's (MOM) Labour Market Report published on Monday.
The latest data is even steeper than the 19,900 decline predicted in the MOM’s advance estimates published on April 29, and marks Singapore’s largest quarterly contraction on record since the SARS pandemic which saw hiring plummet by 24,000 in 2Q2003.
See: Unemployment rate rises to 2.4% in 1Q20, but economists say more layoffs and job losses to come
Specifically, the decline was heralded by the trade and tourism-related services which have taken the biggest hit from the stoppage of travel and consumption due to the coronavirus pandemic.
From its segments, food and beverage services (-8,300), retail trade (-5,400), wholesale trade (-3,300), accommodation (-2,600) and arts, entertainment and recreation (-2,300) saw the biggest headcount declines.
The stay home notices and quarantine orders imposed on workers in the manufacturing (-3,300) and construction (-5,800) sectors also saw these sectors posting lower payrolls.
However, bright spots was seen in financial and insurance services (+2,800), public administration and education (+2,500) and professional services (+2,500). This comes as these sectors were considered essential and needed more people to drive business operations amid heightened demand for their services.
Even so, Singapore’s seasonally-adjusted unemployment rate edged up slightly at 0.1 percentage points in March, in line with expectations of a softer labour market outlook.
The city-state’s unemployment rate rose to 2.4% in March, slightly worse than the 2.3% recorded in December 2019.
Unemployment among both residents and citizens rose; the percentage of unemployed residents hit 3.3% in March, from 3.2% in December 2019. This translates to an increase in the number of unemployed residents to 76,200, from 73,900 persons before.
Meanwhile, the rate for Singaporeans increased to 3.5%, from 3.3% in the preceding quarter. At this level, the number of unemployed Singaporeans hit 66,900 from 63,500 in December 2019.
The long-term resident unemployment rate – which reflects data on the unemployment of individuals for over 25 weeks – remained at 0.9%.
“The unemployment rates for most age and education groups remained within the non-recessionary range, except for residents aged below 30, whose rate increased significantly,” the report highlighted. The rate for these for this category rose 0.5 percentage points to 6.8% in March, from 6.3% in December 2019.
Another vulnerable age category highlighted in the report was of those aged 40 - 49. The unemployment rate for these individuals edged up to 2.5% in March, from 2.5% in December 2019.
Overall, the unemployment rate remains lower than the 4.8% recorded in September 2003 after the SARS pandemic, as well as the 3.3% seen in September 2009 during the height of the Global Financial Crisis (GFC).
Aside from this, retrenchments for March hit 3,220, from the 2,670 layoffs in December 2019. This is a result of sectoral downturns, MOM observes.
For instance, some 1,537 local employees were affected by business closures in 1Q20 – more than double the 628 seen in 4Q19.
An additional 4,190 employees were placed on shorter work hours or furloughs - a five-fold increase from the 840 in the preceding quarter, but lower than the 26,530 during the peak of the GFC.
Dwindling job vacancies
A cause for concern comes from the current ratio of job vacancies to unemployed persons. The metric has tumbled to 0.71 – its lowest in a decade – from the 0.84 it was at in December 2019.
A number less than 1, implies that the number of available jobs is insufficient to serve all the unemployed, even if they undergo retraining.
In this instance, it means there are only seven placements for every 10 persons unemployed in Singapore.
In absolute terms, there were 46,300 job vacancies in March, compared to 52,700 last December.
Speaking ahead of the release of the report on June 12, Manpower Minister Josephine Teo cautioned that the full tremors of the Covid-19 health-turned-economic crisis had not yet been felt in 1Q20.
This is, as activity levels remained high in January during the new year festivities. She notes that tourism had only taken a hit in February when travel restrictions, particularly for non-essential travel, were imposed.
With the circuit breaker restrictions on non-essential activities having taken off in April, market watchers expect labour movements to take a greater hit in 2Q20.
But Teo takes solace in that the unemployment rate did not spike up – a move she attributes to the government’s wage and job support measures which cushioned the extent of the metric’s decline.
Touching on the retrenchment level, she noted that companies’ placement of employees on shorter work weeks or temporary layoffs, mitigated a further increase.
"We do not know exactly how the second quarter will turn out but it is best for us to get ready and be prepared for more job losses and we have to try our very best to open up more pathway for job seekers,” pondered Teo.
Help is already on its way through the 100,000 job opportunities announced in the Fortitude Budget. These opportunities will cover three aspects: 40,000 new jobs, 25,000 traineeships and 30,000 paid skills training placements.
"While we will try to preserve jobs in the midst of this crisis, we cannot protect every job. However, you have my assurance that the Government will protect every worker,” Deputy Prime Minister Heng Swee Keat said as he unveiled the initiative in his Budget speech.
See: Government injects additional $33 billion in Covid-19 relief measures, with focus on jobs
