The labour market continued to expand in the first quarter of 2024, although at a slower pace compared to preceding quarters, the Ministry of Manpower (MOM) said on Tuesday (Apr 30).
Retrenchments, meanwhile, declined for a second consecutive quarter with unemployment rates remaining low, MOM said in an advance release of its labour force report for the quarter.
The slower growth continues the trend of cooling labour demand in 2023, with downside risks in the global economy remaining, the ministry said.
“Nevertheless, total employment growth increased in the first quarter amidst moderate tightness in the labour market, driven wholly by an increase in resident employment as unemployment rates remained low,” it said.
Excluding migrant domestic workers, total employment grew by 4,900 in the first three months of this year. This is lower than the growth of 7,500 reported in the fourth quarter of 2023.
This employment growth was “wholly supported by an increase in resident employment”, with non-resident employment contracting for the first time since the third quarter of 2021 amid the cooling demand for labour, MOM said.
“This increase in resident employment was higher than that in the previous quarters in 2023, and was comparable to resident employment growth in non-recessionary periods,” the ministry added.
Despite the dip in non-resident employment, MOM said that applications for higher-skilled non-residents – such as employment pass holders – had “picked up in tandem with improved business expectations”.
The increase in resident employment was mainly attributable to growth in the financial services, health and social services, and public administration and education sectors.
“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,” MOM said.
The decline in non-resident employment was mainly attributable to a contraction in the construction sector.
“Employment in the sector fell for the first time since 4Q 2021, as construction firms adapted to the reduction in the sector’s dependency ratio ceiling from 1:7 to 1:5, with effect from Jan 1, 2024,” MOM said.
The dependency ratio ceiling refers to the maximum ratio of foreign workers to the total workforce that a company in a given sector can employ.
Smaller declines were seen in the manufacturing and information and communications sectors.
Retrenchments Down, Unemployment Rates Up In March
Retrenchments in the first quarter of this year dipped to 3,000 from the 3,460 reported in the last quarter of 2023.
Business reorganisation or restructuring remained the top reason for retrenchments during the quarter, MOM said.
While unemployment rates remained within their pre-pandemic ranges, they increased slightly in March.
As of March, overall unemployment stood at 2.1 per cent; resident unemployment at 3 per cent; and citizen unemployment at 3.1 per cent.
“The increase was not unexpected – we had previously highlighted that unemployment rates could edge up amid higher retrenchments in 3Q and 4Q 2023,” MOM said.
“However, we do not expect sustained increases in unemployment rates, given continued labour market tightness.”
Outlook
With Ministry of Trade and Industry advance estimates showing that Singapore’s economy is expected to improve in 2024, labour demand should strengthen correspondingly, MOM said, adding that labour demand tends to lag economic growth.
“MOM’s forward-looking polls also suggested improved hiring demand, with 50.7 per cent of firms indicating an intention to hire in the next three months,” the ministry said. This is an increase from the 47.7 per cent reported previously.
“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 added.
With slowing resident workforce growth and low resident unemployment rates, it will be less likely for resident workforce growth to sustain Singapore’s economic growth, MOM said.
“Instead, MOM, together with economic agencies, will help our businesses press on with transformation to become more manpower-lean and productive, generating better jobs for Singaporeans in the workforce and resources for national development,” it said.
“To achieve this, it is imperative that Singapore continues to attract highly skilled foreign workers that complement our resident workforce and help our businesses and economy to compete and to thrive.”
The ministry added that the government is advising employers and workers “to make full use of available programmes to remain competitive and resilient amidst economic uncertainty”.
“Workers should continue to upskill and be open to new opportunities. Employers should press on with business transformation and equip their workers for expanded or redesigned job roles,” MOM said.
The labour market report for the first quarter of 2024, which is due for release in mid-June, will provide a comprehensive assessment and more details of the labour market situation during the quarter, MOM added. – CNA
