Foreign workforce growth in first half slowest since 2009

Singapore

THE foreign worker population expanded by just 8,000 in the first half of 2015, the lowest half-yearly growth since the global financial crisis in 2009.

This figure, which excludes maids, continues a downward trend in foreign employment growth in recent years. The tap has tightened considerably following the government's ongoing efforts to curb the inflows.

Last year's foreign workforce inflow of 26,000 was less than a third of the growth pace of 80,000 back in 2011.

The latest figure for June 2015 was announced by the Manpower Ministry (MOM) on Tuesday, four days after Singapore's general election that saw the hot-button topic of foreigners and immigration feature prominently once again during the hustings.

The ministry said the services sector accounted for a majority of the foreign employment growth for the first six months of 2015, while work-permit holders made up the largest proportion of the growth.

Overall, more people are working in Singapore as at June 2015, with total employment reaching nearly 3.63 million after the second quarter's total employment went up by 9,700.

While this was lower than the 27,700 increase in the same quarter last year, it was still good news after a weak first quarter that had a contraction of 6,100 jobs, which was the country's first quarterly total employment decline since 2009.

In its labour market report for the second quarter, the MOM said that 3,627,500 people were employed in June this year, 2.2 per cent higher than a year ago. This year-on-year growth, however, was lower than the 2.7 per cent in March 2015.

The second-quarter growth was driven by construction (+7,600) and services (+6,500) as the manufacturing sector shrunk by 4,400 jobs on the back of lower output.

The increases in services - led by administrative and support services (+7,000), community, social and personal services (+3,900), and professional services (+2,200) - were partly offset by declines in wholesale & retail trade (-7,000) and real estate services (-3,400).

According to MOM, the declines in wholesale and retail trade could have stemmed from weaker re-exports and sluggish non-motor vehicle retail sales which protracted the employment lull typically seen for the sector in the first half of the year.

The report, published by the ministry's manpower research and statistics department, added that real estate services continued to cut back on employment amid the softer property market.

The unemployment rate remained "low and stable" amid the tight labour market. The seasonally-adjusted citizen unemployment rate was 2.9 per cent in June 2015, the same as a year ago.

The long-term unemployment rate edged up over the year. About 15,500 residents, forming 0.7 per cent of the resident labour force, had been looking for work for at least 25 weeks in June 2015, up from 13,900 (or 0.6 per cent) a year ago.

Turning to redundancies, about 3,250 workers were laid off in the second quarter of 2015, fewer than the 3,500 affected in the previous quarter but higher than the 2,410 in the second quarter of 2014.

Layoffs fell over the quarter in manufacturing and construction, but went up in services. Services formed the bulk of the redundancies with 65 per cent overall, followed by manufacturing (27 per cent) and construction (7 per cent).

The PMET group - professionals, managers, executives and technicians - made up seven in ten of all residents laid off in the April to June 2015 period.

This was followed by clerical, sales and service workers (16 per cent) and production and transport operators, cleaners and labourers (13 per cent). Sixty-four per cent of the residents affected were workers aged 40 and above.

There wasn't much to cheer about on the productivity front, either. For the first half of this year, labour productivity fell by 0.5 per cent year on year, following drops of 0.4 per cent and 1.2 per cent in the first and second half of 2014 respectively.

All three main sectors - manufacturing, construction and services - experienced declines in the first half of 2015. The services sector, for instance, has seen its productivity on a downward trend since a year ago.

"Overall productivity growth is not likely to see a significant uplift this year. Nonetheless, some sectors such as finance and insurance, and wholesale trade, which have performed relatively well to-date, could continue to see modest productivity growth," said MOM.

Femke Hellemons, country manager of recruitment firm Adecco Singapore, anticipates a healthy labour market for the rest of the year, with higher demand for skills especially in the engineering, supply chain, IT, audit and retail sectors.

"We expect employment growth, with good job opportunities and higher salaries for those individuals with skills and experience in most demand. More efforts should be done to sustain productivity improvement especially in domestic-oriented services," she said.

The MOM added that Singapore's labour supply would remain tight and be felt more keenly by the more labour-intensive industries such as retail trade, food and beverage services, and accommodation.

"The tight labour market will continue to place upward pressure on wages. However, these wage increases can only be sustained through productivity growth, with the upgrading of jobs and skills," said the ministry.