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Singapore's total employment falls by record 103,500 in Q2; retrenchments double
EMPLOYMENT fell by a record 103,500 in the second quarter of the year, a staggering four times the previous record contraction - in the first quarter - of 25,600, according to the Singapore Ministry of Manpower's Labour Market Report released on Monday.
But other major indicators such as retrenchments and unemployment stayed below past recessionary peaks, as firms took cost-saving measures for an unprecedented number of workers.
To “detect shifts in the employment situation in a more timely manner”, the MOM will release unemployment rates on a monthly basis, for the first time.
Retrenchments more than doubled to 8,130 in the quarter, compared to 3,220 in the first quarter. This was still below previous peaks during the dot-com bubble and the Global Financial Crisis.
Just over half of those retrenched were PMETs (professionals, managers, executives and technicians), with the incidence of retrenchment rising sharply for non-PMETs.
The sharp rise in retrenchments came even as firms took temporary cost-saving measures to retain staff, with a record number of employees affected. In the second quarter, 43,130 employees were placed on temporary layoffs, while 38,600 were placed on a short work week. Such measures likely reduced the number of retrenchments, said the MOM.
Seasonally adjusted unemployment rates rose over the quarter, with the overall unemployment rate at 2.8 per cent in June, up from 2.4 per cent in March; the resident unemployment rate at 3.8 per cent, up from 3.3 per cent; and the citizen unemployment rate at 4 per cent, up from 3.5 per cent. But these, too, were below past recessionary peaks.
The increase in the resident unemployment rate was driven by a rise in short-term unemployment, as the seasonally-adjusted resident long-term unemployment rate actually dipped marginally to 0.8 per cent, from 0.9 per cent previously.
Job vacancies decreased slightly to 42,400 as at June, down from 46,300 in March. Together with the increase in unemployed persons, this lowered the seasonally adjusted ratio of vacancies to unemployed persons to 0.57 in June, down from 0.71 in March.
Some sectors did, however, see more vacancies in the second quarter compared to the first quarter. These sectors included public administration and education, administrative and support services, as well as food and beverage services.
Sectors seeing the greatest falls in employment during Q2 were those hit hardest by "circuit-breaker" and safe-distancing measures, such as construction (-13,600), food and beverage services (-22,900), retail trade (-8,000), arts, entertainment and recreation (-7,600), and administrative and support services (-7,600).
Weak external demand also took a toll on employment in the wholesale trade (-7,900) and manufacturing (-8,900) sectors, although the electronics sub-sector recorded a rise in employment with 1,000 more workers in the second quarter.
With the latest figures, total employment excluding foreign domestic workers contracted by 129,100 in the first half of the year. The employment losses were disproportionately in the foreign workforce, with foreign employment falling 5.7 per cent or by 66,400, compared to the 2.7 per cent or 62,700 decline in local employment.
Firm closures accounted for just 3.8 per cent or 2,355 of the decline in local employment during the first half of the year.
In a statement on labour market developments, the MOM said it expects softness in the labour market to persist, "with continued weakness in hiring and pressure on companies to retrench".
But it noted areas of strength in the economy, with expected growth for electronics and precision engineering, biomedical manufacturing, information and communications, as well as finance and insurance.