Job growth in first 9 months weakest in 6 years (Amended)

Singapore

EMPLOYMENT growth in the third quarter slowed sharply from a year ago, dragging expansion in the first nine months down to its lowest since the recession year of 2009.

Meanwhile, a softer economy continued to weigh on jobs, raising the unemployment rate further in September by 0.2 percentage point for residents and citizens to 3 and 3.1 per cent respectively - even though the overall jobless rate stayed unchanged at a seasonally-adjusted 2 per cent.

The increase in unemployment hit those aged 40 and above the hardest, according to the Ministry of Manpower's Labour Market Third Quarter report released on Tuesday.

A total of 12,600 jobs were added in the July-September quarter, down from 16,400 estimated earlier. And while the number was still higher than in the second quarter, when 9,700 jobs were created, it was way below the 33,400 figure in the same quarter last year.

"Cumulatively for the first three quarters of this year, total employment grew by 16,200, which is the lowest growth since 2009," the report says.

Citigroup economist Kit Wei Zheng noted that it was less than one-fifth of the 89,400 jobs gained in the first three quarters of 2014 - and it was consistent with the Monetary Authority of Singapore's expectations that annual job growth will not exceed 50,000 from hereon.

Femke Hellemons, country manager of recruitment firm Adecco Singapore, said that it's "quite common" for job growth to drop in the third and fourth quarter. Yet, MOM said in its Labour Market, Third Quarter 2015 report that employment growth had eased in the first half of the year, with jobs actually cut back by 6,100 in the first three months.

Jaya Dass, country director of employment firm Randstad, blamed the slow job growth on a wobbly economy as well as the government's move to cut dependence on foreign labour and increase productivity.

Citigroup's Mr Kit thinks the slowdown this time has more to do with a "cyclical softening" than supply constraints.

The employment gains in the third quarter were driven mainly by the services sector, which added 13,300 workers. Wholesale and retail trade (minus 2,300 jobs) and real estate services (minus 500 jobs) continued to cut back on recruitment.

The construction sector (3,700 jobs) still saw job growth but slackening building activity eased employment gains in the sector. Hiring in manufacturing (minus 4,300 jobs) tumbled for a fourth straight quarter as output remained weak.

More workers were axed in the third quarter, with 3,460 made redundant. This was 200 more workers than in the second quarter, but about the same as in the same quarter last year.

Layoffs rose in all sectors, with professionals, managers, executives and technicians accounting for around 70 per cent of all residents retrenched in this period.

Three in five of the retrenched workers were from the services sector, 26 per cent from manufacturing and 12 per cent from construction.

Still, the rate of re-entry into employment within six months of layoff stood unchanged from the previous quarter at 55 per cent. But job-seekers aged 40 and above found it increasingly hard to find a new job. Their re-entry rates fell for the third quarter in a row.

While job openings still outnumbered job-seekers in the third quarter, the ratio evened out further. Seasonally-adjusted vacancies fell over the quarter by 11 per cent to 55,600 in September. The ratio of job openings to job-seekers moderated to 116 vacancies per 100 job-seekers, from 121 in June - a ratio not seen since June 2013.

[Amendment note]: The earlier version of the story quoted Labour Market, Third Quarter 2015 as the source for "employment growth had eased in the first half of the year, with jobs actually cut back by 6,100 in the first three months". The correct source should be the Singapore Workforce 2015 report.