SINGAPORE: Singapore’s unemployment rate reached its highest level in a decade, and total employment fell to a record level in the first quarter of this year, as the labor market experienced the first effects of COVID-19.
According to the latest labor market report published by the Ministry of Manpower (MOM) on Monday, June 15, the overall unemployment rate fell from 2.3% in the previous quarter to 2.4%.
The unemployment rate among Singapore citizens fell from 3.3% to 3.5%, and among residents – or Singapore citizens and permanent residents – from 3.2% to 3.3%.
The long-term unemployment rate for residents, referring to those who have been unemployed for at least 25 weeks, remained at 0.9%.
Layoffs fell from 2,670 to 3,220 in the first quarter, largely due to industry downturns, MOM said.
The ministry found that 1,537 local employees were affected by business closings in the first quarter of this year, more than double the 628 in the previous quarter.
4,190 additional employees were assigned to shorter hours or holidays – a five-fold increase from 840 the previous quarter, but less than 26,530 during the peak of the global financial crisis.
MOM said it means employers choose to make temporary adjustments to manage excess labor and cut business costs instead of letting people go.
JOB VACANCIES DWINDLE
The ratio of vacancies to the unemployed fell to its lowest level in ten years, dropping from 0.84 to 0.71 in the first quarter. This means that there were only seven openings for 10 unemployed people in Singapore.
There were 46,300 vacancies in March of this year, compared to 52,700 in December of last year.
The food and beverage, arts and entertainment and administrative sectors experienced the largest drop in vacancies, while openings in areas such as information technology and health care increases.
The average number of weekly paid hours also decreased to 0.3 hours in the quarter to 44.4 hours in March, reflecting a decrease in paid overtime.
TOTAL EMPLOYMENT FALLS TO RECORD LOW
Total employment, excluding foreign domestic workers, registered its largest quarterly contraction ever recorded, falling by 25,600 in the first quarter after increasing by 19,800 in the previous quarter.
This was more than the preliminary estimate of 19,900 MOM released in April.
The decline was larger than what was seen during the severe acute respiratory syndrome (SARS) epidemic in the second quarter of 2003 and the global financial crisis in the first quarter of 2009 when employment contracted 24,000 and 8,000 respectively. MOM said the decline was due to a significant drop in overseas employment, although local employment has also declined.
Industries linked to trade and tourism, as well as construction, were the hardest hit by the reduction in employment.
The number of people employed in the hotel and restaurant, construction and retail trade – the three sectors with the largest declines in employment – fell by 8,300, 5,800 and 5 respectively 400 during the period from January to March.
On the other hand, public administration and education, professional services and financial services saw employment grow by more than 2,000 each, although gains in these sectors were not enough to offset losses in others.
Speaking before the report was released on Friday, the Minister of Manpower, Joséphine Teo, warned that the full effects of COVID-19 had not yet been felt in the first quarter.
Activity levels in January were still quite high considering the New Years festivities, she said. And although tourism has been hit hard since February, most travel restrictions were not yet in place and the “circuit breaker” only came into effect in April.
However, Ms. Teo said the report showed some “silver liners”.
Referring to the unemployment rate, she said that although it has increased, it has not increased as government job and wage support measures have provided some coverage.
And although layoffs increased, there were many more employees placed on shorter workweeks or temporary layoffs.
“This suggests that the measures which are supported by the tripartite partners, although they involve certain sacrifices, in particular on the part of the workers, they also contribute to preserving jobs,” she said.
Looking ahead, Teo said Singapore needs to prepare for more layoffs and help those who have lost their jobs.
“We must do our best to open more avenues for job seekers,” she said, citing the national employment strategy which aims to create 100,000 job opportunities. Part of the strategy is to ask the public sector to present their hiring plans.
Source: CNA / cy