Bosses face more painful labour crunch this year

EMPLOYERS who have been moaning about labour shortage in the past year face a more painful crunch in 2014 as the jobs market tightens further and puts upward pressures on wage costs, the Ministry of Manpower has warned.

This makes it even more urgent for Singapore to raise productivity and switch to manpower-lean ways to grow business, it said yesterday when releasing the annual Labour Market 2013 report.

Sounding the alert on a tighter labour squeeze, the ministry said that previously announced measures - such as lower dependency ratio ceilings and higher foreign worker levies - to slow the inflow of foreign employees would come into force in July this year, while the growth in local workforce is running into demographic constraints.

At the same time, it noted, ongoing infrastructure projects such as the Downtown and Thomson MRT lines, hospitals and housing developments as well as the opening of new hotels and shopping malls would lead to strong demand for workers in the construction and services sectors.

In urging employers to put in more effort to improve productivity, the ministry said it is reviewing the Continuing Education and Training Masterplan to support the re-skilling and upgrading of workers.

According to the Labour Market 2013 report, productivity improved last year after a 2.0 per cent dip in 2012, but growth was still flat, especially in the construction and parts of the services sectors.

While labour productivity rose 1.5 per cent yearly between 2008 and 2013, real median income grew 1.7 per cent per annum in the same period.

"There is a need to sustain and broaden the recent improvement in productivity growth," the ministry said.

The pressures on wages are already evident. The report revealed that real median monthly income (include employers' CPF contributions) jumped 4.6 per cent in 2013, up from 1.2 per cent in 2012.

"This reflected strong nominal income gains amidst tight labour market conditions, as well as moderating inflation," it said.

The average overall unemployment rate slipped 0.1 percentage point in 2013 to 1.9 per cent.

The jobless rate for citizens also fell by the same amount to 2.9 per cent, as employers turned more to local workers because of the tighter foreign worker policy.

Driven largely by local employment gains, total jobs growth was 4.1 per cent (or 136,200) in 2013, against 4.0 per cent (129,100) in 2012. Foreign workers accounted for 36.9 per cent of the total growth (minus foreign domestic workers) last year, down from 53.3 per cent in 2012.

Local employment rose 4.0 per cent (82,900) last year, compared to 2.9 per cent (58,700) in 2012, as employers lured economically inactive older and female Singaporeans back to work.

"Overall, the bulk of the growth in local employment were in the services sector (77,100), led by the community, social and personal services, professional services, administration and support services and food and beverage services industries," the ministry said.

Foreign employment gains slowed for a second straight year to 4.6 per cent (48,400) in 2013, against 6.8 per cent (67,100) in 2012. The bulk of the growth came from the construction sector.

Excluding construction and foreign domestic maids, foreign employment grew 2.3 per cent (16,800) last year, down from 4.6 per cent (32,200) in 2012.