Singapore’s employment growth eases in Q1
Job rates within the construction sector fall on tighter foreign worker quotas
SINGAPORE’S employment levels expanded in the first quarter, but at a moderated pace from before, early data from the Ministry of Manpower (MOM) showed on Tuesday (Apr 30).
Non-resident employment contracted for the first time since Q3 2021 due to cooling labour demand, mainly in construction.
Total employment – excluding migrant domestic workers – rose by 4,900 in Q1, lower than the 7,500 recorded in Q4 2023.
This was “wholly supported” by an increase in resident employment, MOM said.
“This increase in resident employment was higher than that in the previous quarters of 2023, and was comparable to resident employment growth in non-recessionary periods,” the ministry noted.
The decline in non-resident employment during Q1 was largely due to a fall in the number of work permit (WP) holders in the construction sector.
Such workers account for “a significant portion of WP holders and (are) traditionally the main driver of non-resident employment growth”, MOM said.
Employment within the construction sector fell for the first time since Q4 2021, as firms adapted to a reduction in the sector’s dependency ratio ceiling (DRC) to 1:5, from the previous 1:7. The DRC specifies the maximum S Pass and WP holders that a company may employ as a proportion of its total workforce.
The reduction in the construction sector’s DRC, which was announced in Budget 2022, kicked in from Jan 1.
There were also smaller declines in outward-oriented sectors such as manufacturing, and information and communications.
DBS economist Chua Han Teng noted that the manufacturing sector “saw moderating retrenchments but still-weak employment data”.
“In our view, the lack of new near-term hiring was probably due to the uneven recovery and lingering global uncertainties that kept manufacturers cautious,” Chua said.
Retrenchments fell for the second consecutive quarter, with business reorganisation or restructuring cited as the main reason, MOM said.
There were 3,000 layoffs in Q1, easing from the 3,460 recorded in the preceding quarter.
Unemployment rates “edged up slightly” in March, through they remained within the range observed during non-recessionary periods, MOM said.
Overall unemployment increas Total employment – excluding migrant domestic workers – rises by 4,900 in Q1, lower than the 7,500 recorded in Q4 2023. ed marginally to 2.1 per cent, from 2 per cent in February.
Citizen unemployment rose to 3.1 per cent, from 3 per cent previously, while resident unemployment grew to 3 per cent, from 2.8 per cent in February.
“However, we do not expect sustained increases in unemployment rates, given continued labour market tightness,” MOM said.
Forward-looking polls conducted by the ministry were mixed. More firms intend to hire in the next three months, with 50.7 per cent in the affirmative. This was up from 47.7 per cent in the previous quarterly survey.
However, wage improvements could slow, MOM said, as the number of firms which intend to raise wages declined to 26.1 per cent from 32.6 per cent previously.
This implies that local businesses “appear to be adopting a cautious stance in the near term”, Chua noted.
The full report of the labour market’s performance in Q1 will be released in mid-june.