Despite higher retrenchments and a slight increase in unemployment, Singapore’s job market continues to show growth.
Singapore saw a rise in retrenchments and unemployment in the third quarter of 2023, but the job market remains on an upward trajectory, according to the latest data released by the Ministry of Manpower (MOM).
Retrenchments increased by 900, from 3,200 in Q2 to 4,100 in Q3, with the wholesale trade sector seeing the most significant rise. The sector, which is the second-largest in Singapore’s economy, employs over 300,000 people, making up 18.6% of the country’s nominal GDP in 2022. The increase in retrenchments is attributed to the weaker economic outlook and external challenges facing this sector.
In terms of unemployment, there were 68,000 unemployed residents (Singaporeans and permanent residents) in September, marking a 3% increase compared to June. While the unemployment rate remained low at 2% overall, the MOM noted a gradual rise in unemployment, with the rate for residents at 2.8% and for Singaporeans at 3%.
The increase in unemployment was also reflected in the rising number of retrenchments across various sectors. The manufacturing sector shed 800 jobs in Q3, while construction saw 200 retrenched workers. The services sector, which includes wholesale trade, saw an increase in layoffs, with 3,100 jobs lost, a significant rise from the 2,550 in the previous quarter.
Despite these challenges, the job market continued to expand for the eighth consecutive quarter, with a 24,000 increase in total employment (excluding migrant domestic workers). This growth was driven by sectors like financial services, professional services, and health and social services for residents, and construction, retail trade, food and beverage services, and administrative support services for non-residents.
The pace of employment growth slowed compared to last year, reflecting a global economic slowdown and worsening business expectations. The proportion of firms intending to hire in the next three months decreased from 58.2% in June to 42.8% in September. Similarly, the number of firms planning to raise wages dropped from 28% to 18%.
Despite these cautionary signs, OCBC chief economist Selena Ling noted that retrenchments remain concentrated in specific industries like wholesale trade. However, she emphasized that the rise in unemployment is not alarming, as it is starting from a relatively low base. She also highlighted that the tourism and hospitality sectors may help offset the slowdown in manufacturing and wholesale trade.
