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Manufacturing leads rising layoffs among unionised jobs
The pace of retrenchment in the manufacturing sector here seems to have quickened for unionised companies, due to cyclical and structural factors.
Some 2,512 workers in the unionised sector were laid off last year, 11.8 per cent more than in 2014, said the National Trades Union Congress (NTUC) in its outlook for the unionised sector for 2016 on Friday.
But manufacturing jobs were vanishing at a faster pace.
Of those who were displaced last year, 93 per cent were from manufacturing. This is sharply up from 2014, when the proportion was about two-thirds.
And NTUC expects 234 workers, mostly from manufacturing, to be retrenched in the first quarter of 2016, 31 per cent more than in the same period last year.
The brittle global economic climate and restructuring of Singapore's economy were cited as factors in the disappearance of manufacturing jobs.
"There could be further restructuring within the manufacturing sector," said Cham Hui Fong, assistant secretary-general of NTUC, at a press briefing on Friday. "Should the economy continue to go farther (in the same direction), then I think we can expect some more (layoffs) in manufacturing."
National employment figures for the last quarter of 2015 will be released next week.
The NTUC covers workers in about 1,400 companies across different sectors, with those in manufacturing taking up a greater representation.
The direness of the challenges that companies faced was underscored by the increase in workers, specifically those in manufacturing, being retrenched.
"In Singapore, it's been a tight labour market, so it's a big disincentive for companies to lay off workers," said CIMB Private Bank economist Song Seng Wun. "These companies are turning to last-resort measures."
The main reasons cited by unionised companies for retrenchment were company restructuring, poor business, closure of operations or discontinuation of production lines, said NTUC.
Signs of a cyclical downturn were already evident in the middle of last year when some unionised companies had already stopped workers from working overtime as they struggled with overcapacity amid dwindling orders.
By the end of the year, unionised companies had taken it one step farther to implement shorter work weeks, with 2,098 workers at nine companies affected, a 59 per cent jump from 1,323 at five companies in 2014.
The number of workers approaching NTUC for industrial relations issues last year also marked a new high - 2,851.
Structural issues seemed to be at play for the increased layoffs of manufacturing workers, too.
The sector, together with the retail and hotel sectors, expressed a mixed to weak outlook for the year ahead. Only the healthcare, security, air transport and pharmaceutical sectors were upbeat.
Echoing these concerns, Ms Cham said that the expected 234 layoffs this quarter is a result of a weakening economic outlook. But she also cautioned against alarm, as some of them come from planned retrenchments in 2015. "We're hoping that it could just be cyclical, and we can turn over quite quickly, then that could be fine."
Help was given to displaced workers through the securing of retrenchment benefits, providing career counselling and assisting in job placement, said NTUC.
Unions also negotiated for training grants paid by companies to support workers to train themselves. Some unionised companies even set aside days of leave for workers to attend courses that are relevant to their work.
There are signs that cyclical challenges may ease for Singapore's manufacturing sector soon, however.
Just earlier this week, the International Monetary Fund released estimates that global growth is expected to reach 3.1 per cent in 2015, and quicken to 3.4 per cent in 2016. This will provide a boost to Singapore's trade-reliant economy.
In addition, increased funding for the manufacturing sector may relieve structural pressure.
Noting that the level of investment commitment for the sector in the first three quarters of last year has already outstripped the total for the year 2014, and is near to 2013's total, CIMB's Mr Song expressed optimism that Singapore's manufacturing will restructure itself into a more higher value-added one.
"Anyone who wants to manfuacture in Singapore has to realise that it's a very expensive place to be, so you must have a very strong justification to be here.
"Looking at these investment numbers, all is not lost for Singapore's manufacturing."
Separately, NTUC sees annual increment for workers in unionised companies in 2015 to dip to 4 per cent, from 4.3 per cent in 2014.
In terms of bonus payout, NTUC sees unionised companies giving out an average of 2.98 months in 2015, a slight increase from 2.89 months in 2014.