How did Singapore’s labour market perform in 2016?

The performance reflected “subdued conditions” in several segments of the economy

How did Singapore’s labour market perform in 2016?
The resident unemployment rate slightly rose to 3% in 2016 from 2.8% in 2015, marking the highest figure since 2010, the Ministry of Manpower (MOM) said on Wednesday.

“The labour market weakened in 2016, reflecting subdued conditions in several segments of the economy,” it said in its “Statement on Labour Market Developments.”

The increase was broad-based across most age and education groups, with larger increases among those aged 30 to 39 and 50 & over, as well as those with secondary and degree qualifications.

Although the unemployment rate remained low, 2016 saw an increase in redundancies and a decline in job vacancies. “Total employment grew at a slower rate, reflecting cyclical weakness in parts of the economy, a structural slowdown in local labour force growth, and tightened foreign worker policy,” MOM said.

Excluding Foreign Domestic Workers (FDWs), total employment grew by 8,600 – lower than in 2015 (23,300) and a large drop from the yearly average of 120,000 between 2010 and 2014.

Foreign employment contracted by 2,500, continuing a downward trend since 2011. This was mainly due to the decrease in Work Permit Holders (-7,900) in the Manufacturing, Marine and Construction sectors, MOM said.

There were 19,170 redundancies in 2016, continuing an upward trend. MOM said this was mainly due to “business restructuring and reorganisation.” The figure is still lower than the recessionary high (23,430) in 2009. “Residents were proportionally less affected, with their share of redundancies (58%) remaining lower than their share of employment (66%).”

Median income growth moderated for Singaporeans in 2016 after strong growth in 2015. The nominal median monthly income from work (including employer Central Provident Fund contributions) of full-time employed Singaporeans increased by 0.7% over the year to $3,823 in June 2016, or 1.3% in real terms, said MOM.

MOM expects labour demand to remain modest this year, in line with the Ministry of Trade and Industry (MTI) forecast of modest GDP growth (1.0 to 3.0%).

“While year-to-year employment and productivity figures may be influenced by cyclical factors affecting demand, businesses should press on with transformation efforts so that they can continue to grow in a structurally manpower-lean environment,” said MOM.

“With slower local labour force growth and the improving skills and education profile of our workforce, our priority is to maximise the quality of jobs, both in new growth areas as well as through re-designing of existing jobs.”

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