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Unemployment in S'pore creeps up to 2.1% in June: MOM
THE unemployment rate and the number of redundancies in Singapore increased from March to June this year, according to the Manpower Ministry's (MOM) preliminary labour market data for the second quarter of 2016.
The seasonally adjusted unemployment rate was 2.1 per cent in June, up from 1.9 per cent in March, and this latest figure is the highest since March 2014.
The report, released on Thursday, found that the unemployment rate for citizens went up to 3.1 per cent in June, from 2.6 per cent in March.
For Singaporeans and permanent residents (PRs), it went up to 3 per cent in June, from 2.7 per cent in March.
DBS senior economist Irvin Seah wrote in a note that "more cracks are showing" in Singapore's labour market, adding that the unemployment rate for residents was the highest since December 2010.
"The most glaring detail was probably the 0.5 percentage point uptick in the unemployment rate for Singapore citizens. This increase is significant," he said.
The MOM report showed that unemployment among residents and citizens had declined in the previous quarter because of a lower labour force participation rate among those in the 15-24 age bracket.
In June, an estimated 68,300 residents, including 60,300 Singaporeans, were unemployed. This was higher than the 60,400 residents, including 50,800 Singaporeans, who were unemployed in March.
The total number of people employed in Singapore was estimated to have increased by 5,500 in the second quarter of this year. The growth pace was slower than in the first quarter of 2016 (13,000) and in the second quarter of last year (9,700), and the ministry attributed this to "subdued global economic conditions".
The report also pointed to a "broad-based slowdown" in employment growth across the services, manufacturing and construction sectors.
Services, which formed the bulk of total employment increases in the second quarter of 2016, grew by 8,600, slower than in the previous quarter (13,200).
Employment in manufacturing, meanwhile, continued to trend down (-3,400). Construction employment grew by 400 in the second quarter, following a 1,900 increase in the preceding quarter.
DBS's Mr Seah wrote that the "persistent moderation" in the services sector's job growth underscored its current state of weakness.
He added that the fact that manufacturing continues to shed jobs implied that "recession in this sector is probably not over yet", although he went on to say that this could be an unintended result of automation.
Overall, Singapore's total employment stood at 3,674,700 as at June 2016, which is 1.3 per cent higher than a year ago. This was similar to the 1.4 per cent pace in March 2016, but slower than the average growth of about 2 per cent in 2015.
As for layoffs, the MOM data showed that some 5,500 workers were made redundant in the second quarter, up from 4,710 in the first quarter and 3,250 a year ago.
Services formed the bulk of redundancies (62 per cent) in the second quarter as the sector laid off 3,400 workers, up from 2,530 in the first quarter.
The 1,600 layoffs in manufacturing was lower than the 1,790 in the first quarter, while the number for construction remained stable at 400 (compared to 390 in the first quarter).
Commenting on the layoff figures, National Trades Union Congress assistant secretary-general Patrick Tay expressed concern for the PMET (professionals, managers, executives and technicians) group, especially those older than 40 as they will face challenges ahead.
"This time, it is both cyclical and structural challenges and we need to stay ready, relevant and resilient to weather the storm," he said.
Selena Ling, head of treasury research and strategy at OCBC Bank, cited several factors that could affect job creation down the road.
"Looking ahead, a subdued growth environment post-Brexit, domestic economic restructuring and slowing local labour force growth will likely constrain job creation," she wrote in a note.
However, she does not expect Singapore's unemployment rate to "deviate too far from the 2 per cent handle for now" as the country's second-half GDP growth would likely be as sluggish as the first six months, while foreign manpower restrictions are also unlikely to be lifted in the near-term.
The Monetary Authority of Singapore expects the Singapore economy's performance over the next six months to be unchanged from the first half of the year, where growth averaged 2.2 per cent year-on-year.