Singapore's Q1 total employment sees sharpest contraction since Sars

SINGAPORE'S total employment for the first three months of 2020 registered its sharpest quarterly contraction in 17 years due to a "significant decline" in foreign employment amid the novel coronavirus outbreak, preliminary data showed on Wednesday.

Estimates released by the Ministry of Manpower (MOM) indicated that total employment in Q1, excluding foreign domestic workers, shrank by 19,000, compared with the 24,000 contraction seen in Q2 2003 during the peak of the severe acute respiratory syndrome (Sars) outbreak.

At the same time, overall unemployment rate inched up to 2.4 per cent in Q1, from 2.3 per cent in Q4 2019. Resident unemployment rate rose to 3.3 per cent from 3.2 per cent, while citizen unemployment rate went up to 3.5 per cent from 3.3 per cent. According to MOM data, these figures remain lower than the highs seen during the Sars outbreak and the 2009 global financial crisis.

Overall retrenchments in Q1 hit 3,000, exceeding the 2,670 seen in Q4 2019. MOM noted that these figures remain significantly lower for now than the quarterly peak during the global financial crisis, which surged to 12,760 in Q1 of 2009.

The services sector bore the brunt of retrenchments, with 2,200 job cuts, while the construction and manufacturing sectors respectively shed 200 and 600 jobs.

Manpower Minister Josephine Teo said the data should be understood in context, given that the economic mood and activity were very different in January compared with February and March, since the novel coronavirus outbreak had taken a turn for the worse in the latter two months.

"What the numbers currently suggest, even though they're preliminary was that in the first quarter, actually local employment not only held up, it actually still managed to grow a little bit," Mrs Teo said, adding that foreign employment saw a much sharper reduction.

This is partly because of travel restrictions that kicked in in February, when the authorities required workers who were intending to return to Singapore from China, to get an approval before they could do so.

"So the numbers were actually kept to a very low level and we see that perhaps some of them still have not returned, and either the companies have decided to exercise their own decision not to ask these workers to return, or the companies, either they cannot hire or have chosen not to do so," Mrs Teo said.

However, MOM is expecting softer labour market conditions in the coming months, given that "circuit-breaker" measures were introduced in April.

Already, the ministry has received about 3,000 notifications from companies intending to implement cost-saving measures. The notification is a mandatory requirement if they intend to cut more than 25 per cent of their employees' salary.

Mrs Teo said this would cover about 100,000 members or 3 per cent of the workforce.

She added that the number of employees who have taken wage cuts could possibly be higher as some companies may not have notified the ministry yet.

In addition, Workforce Singapore chief executive Tan Choon Shian said the agency has so far received a 10 per cent increase in notifications from employers on retrenchments compared with the same period from last year.

Mrs Teo hinted that the actual employment landscape could be grimmer than data suggests, since the "circuit-breaker" measures have also made data collection more challenging.

"We have to accept that it may well be that the companies have already exercised some trimming of their workforce, just that they haven't gotten around to telling us about it," Mrs Teo said.