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Muted outlook for Singapore labour demand, wages, says MOM
WITH job growth in 2015 at only a fraction of the previous two years', and layoffs at the highest since the 2009 recession, the Ministry of Manpower (MOM) expects labour demand to be modest and wage hikes moderate this year.
It said in a statement on Tuesday, just ahead of the release of its Labour Market 2015 report: "MOM is closely monitoring the current economic and labour market situation and is strengthening employment support to help displaced locals re-enter employment."
The weakening labour market has already sparked speculations that the coming Budget will provide some boosters. DBS economist Irvin Seah said in a report that it could include measures like a temporary deferment of income tax payments for retrenched workers, subsidies for employers' CPF contributions and boosts to the Workfare Training Scheme to upgrade the skills of low-wage resident workers.
NTUC is also pushing the government to keep up the support for workers in lifelong learning with a review of the schemes under SkillsFuture.
MOM's Labour Market 2015 report noted that the jobless rate stayed low at 1.9 per cent last year and that job openings outnumbered job seekers. However, the gap is narrowing; total employment growth plunged from 136,200 in 2013 and 130,100 in 2014 to just 32,300 last year - the lowest since 2003.
Employment fell in manufacturing (-22,100), wholesale & retail trade (-9,400) and real estate services (-5,000). These declines were offset by growth in sectors such as community, social and personal services (22,400), administrative and support services (12,300), construction (8,600) and professional services (7,700).
Employment for Singaporeans and permanent residents rose by only a net 700, or zero per cent last year; the figure was 96,000 or 4.4 per cent in 2014 and 82,900 or 4 per cent in 2013. A total of 15,580 workers were made redundant, up about 20.5 per cent from 12,930 in 2014, but this was still lower than in 2009, when more than 23,000 workers were laid off.
The MOM report noted that those affected were finding it harder to get a new job. About half the residents axed in the third quarter of 2015 had managed to secure employment by December - down from 55 per cent in the previous quarter and 59 per cent in the same period in 2014.
Professionals, managers, executives and technicians made up seven in 10 of those laid off.
MOM said: "Structurally, we are starting to see the effects of slowing local workforce growth. (But) even as local employment growth is expected to slow down in the medium term, the moderation was intensified in 2015 due to cyclical weakness in certain sectors and the significant net decline of casual workers from the labour force."
Indicating that labour demand is likely to be limited in 2016, in line with the government's projected gross domestic product (GDP) growth of 1-3 per cent, the ministry said: "Some sectors such as manufacturing, in particular the marine segment, will continue to face softness in labour demand this year."
MOM said the number of layoffs is expected to continue rising in sectors hit by weak global demand and going through restructuring - though domestic-oriented services sectors such as community, social and personal services and food & beverage services are still likely to hire.
"Local workforce growth will remain modest due to demographic effects, while foreign workforce growth will continue to be moderated. We expect wages to rise at a more moderate pace than in 2015."
Nominal median income from work for full-time employed Singaporeans jumped 6.5 per cent over the year to S$3,798 in June 2015, up 7 per cent after adjusting for negative inflation, said the Labour Market 2015 report.
But MOM's statement noted that labour productivity continued to fall in 2015. Value-added per worker dipped 0.1 per cent, after a 0.5 per cent fall in 2014. "The productivity growth of export-oriented sectors as a whole outperformed that of domestically-oriented sectors in 2015," the statement said.
Yet, measured by value-added per actual hour worked, productivity rose one per cent, similar to the 1.1 per cent increase in 2014.