The overall demand for labour in Singapore continues to show signs of cooling, with job vacancies declining even as growth sectors such as healthcare and financial services helped push up employment numbers for its residents.
Finalised Ministry of Manpower (MOM) data for the third quarter of 2023 released on Dec 14 showed the number of job vacancies at 78,400 in September.
This marks a decline for the sixth consecutive quarter from the peak of 126,000 in March 2022.
The ministry said the ratio of job vacancies to unemployed people stood at 1.58 in September, adding that this is down from 1.94 in June.
Almost half of the September vacancies – 38,700 – were for professional, managerial, executive and technical roles in the services industries.
Vacancies in growth sectors, which are associated with higher productivity and pay, made up nearly one-third of the overall job vacancies available, MOM added.
Examples of such sectors include health and social services, information and communications, professional services, and financial and insurance services.
In another sign of cooling demand, growth in the total number employed, excluding migrant domestic workers, slowed to 23,600 workers.
This marks the eighth consecutive quarter of growth, but the pace of increase has been slowing since the third quarter of 2022, which notched an employment growth high of 75,900.
While the growth sectors drove the increase in the employment numbers for residents – Singaporeans and permanent residents – MOM said the figures fell in food and beverage (F&B) services and retail trade.
It stated that the decline was likely due to students leaving their temporary jobs and resuming classes when their vacation ended.
MOM also said that “hiring for temporary staff is expected to pick up in the fourth quarter when F&B and retail outlets ramp up manpower for year-end festivities”.
The overall resident long-term unemployment rate has increased, from a near eight-year low of 0.5% in June to 0.7% in September, which MOM said was similar to the pre-pandemic average of 0.7%.
The ministry added that the rate remained within the range observed in pre-pandemic periods across most age groups.
Meanwhile, non-resident employment grew by 20,800, but this is a slower pace compared with past quarters.
The increase in non-resident employment growth was mainly from construction, administrative and support services, and F&B services, sectors in which jobs were typically lower-paying and temporary, MOM said.
The construction sector, consisting primarily of work permit and other work pass holders, has seen slowing growth since the third quarter of 2022, the ministry said.
“The tapering is expected as employers have backfilled for workers who left during the pandemic,” it added.
MOM also noted that the figure of 20,800 was the smallest growth in non-resident employment observed since the fourth quarter of 2021.
As for retrenchments, the number laid off rose from 3,200 in the previous quarter to 4,110, with the majority of the increase attributed to wholesale trade, where retrenchments rose from 480 to 1,270.
MOM said the number of retrenchments in other sectors remained broadly stable.
It added that retrenchments were primarily due to reorganisation or restructuring, but more retrenching firms also indicated business and cost concerns as reasons for layoffs compared with the previous quarter.
There are also indications that employees are staying for a longer period in any particular job, MOM said.
This is because the recruitment rate fell from 2.3% in the second quarter to 2.2% in the third quarter, while the resignation rate held steady at 1.4%.
MOM said, “Within growth sectors, recruitment trends were mixed.”
Recruitment rates rose in health and social services and professional services, even as they declined in information and communications and financial and insurance services, it noted.
UOB associate economist Jester Koh said that the increased recruitment in health and social services could be partly structural in nature, consistent with the rising demand for healthcare and social services in an ageing population.
“Notably, the year-on-year increase in employment in the health and social services sector has exceeded the year-on-year increase in overall employment on average since 2010,” he added.
He also said the retrenchments in wholesale trade track with the sector’s slowed activity.
External demand for the sector weakened amid an elevated interest rate environment in the United States and European Union, as well as dampened consumer and business sentiment in China, Koh noted.
“However, going forward, a broader recovery in the wholesale trade sector could emerge towards the middle of 2024 as central banks in major advanced economies may begin to cut policy rates as inflation in their respective economies moderates and inches closer to the 2% target,” he said. – The Strait Times
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