Singapore job retrenchments increase to levels last seen in 2016, 2017
Retrenchments increased from 2,990 in the previous quarter to 4,000 in the first quarter of 2023.
SINGAPORE — Job retrenchments continued to increase in the first three months of 2023 (1Q 2023) – to levels last seen in 2016 and 2017 – according to advance labour market estimates released by the Ministry of Manpower (MOM) on Friday (28 April).
This is the third consecutive quarterly increase in retrenchment numbers. Retrenchments increased from 2,990 in the previous quarter to 4,000 in the first quarter of 2023. During the 2016 to 2017 period, quarterly retrenchments ranged from 3,400 to 5,440.
Despite this, however, total employment (excluding migrant domestic workers) grew by 34,500 in 1Q 2023, marking the sixth consecutive quarter of expansion.
The MOM said in a statement that the rise in retrenchments was seen across all three broad sectors of the economy, which included manufacturing, construction, and services. Retrenchments were seen mainly in electronics manufacturing, professional services, and the information and communications sectors.
The top reason for retrenchments for the first quarter of 2023 was business restructuring or reorganisation, as firms "streamlined their operations in anticipation of a slowdown in the economy".
Another reason for retrenchment in this quarter was a downturn in the industry. "MTI's (Ministry of Trade and Industry) advance GDP (gross domestic product) estimates released earlier this month showed that global economic headwinds have contributed towards a slowdown in Singapore's economy, which will weigh on labour demand going forward, particularly for outward-oriented sectors," MOM said. "Employment growth is likely to ease and be uneven across sectors."
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At the same time, hiring sentiments remained positive for the quarter, with 65 per cent of polled firms indicating their intention to increase headcount in the next three months. More firms also indicated they intend to raise the wages of their employees, from 25.3 per cent of polled firms in December 2022 to 38.2 per cent in March 2023.
Still, the labour report noted that against the backdrop of the global economic slowdown and a more uncertain business environment, firms are likely to take a more cautious and targeted approach with salary increments.
Singapore's unemployment rate remained low
Despite the rise in retrenchments, the number of unemployed residents remained low in March 2023.
The total number of unemployed residents fell from 67,100 to 61,500 in March 2023, of which 54,900 were Singapore citizens.
Overall, the unemployment rate was 1.8 per cent of the labour force in March 2023. In the resident category, the unemployment rate stood at 2.5 per cent while the unemployment rate for citizens was 2.7 per cent.
Total employment expanded
Total employment excluding migrant domestic workers in the first quarter of 2023 stood at 3,659,500. As of March 2023, the total employment level had surpassed its pre-pandemic level in December 2019 by 3.9 per cent.
Similar to past quarters, non-residents (non-Singapore citizens or non-permanent residents) contributed to most of the total employment increase and were concentrated in the construction sector.
Resident employment saw the largest gains in community, social and personal services (mainly in public administration and education) and financial services.
The labour market report for 1Q 2023 will be released in mid-June.
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