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SINGAPORE: Staff reductions in the first half of this year rose to their highest level since the 2009 financial crisis, while employment saw a record drop when COVID-19 had a major impact on the labor market.
A total of 11,350 people were laid off in the first half of 2020, more than the 10,120 recorded during the SARS period, but still lower than other recessive peaks, the Ministry of Manpower (MOM) said.
Another 81,720 employees were placed on shorter workweeks or temporarily laid off in the second quarter because business activities were suspended during the two-month “breaker” between April and June.
The six-month re-entry rate among residents laid off in the second quarter of this year also fell to a record low of 58 percent.
Total employment, excluding foreign domestic workers, contracted by 129,100 in the first half of 2020, the largest semi-annual reduction on record.
Foreign employment fell 5.7 percent, or -66,400, which was more pronounced than the 2.7 percent decline, or -62,700, in local employment.
Most of the job cuts abroad occurred among holders of work permits and other work passes (-51,100), followed by S Passes (-11,200) and Employment Passes (-4,100).
Excluding job pass holders from the construction, marine shipyard and process industries, the decline in work permits and other job passes was -32,900 in the first half of this year.
Foreign cuts were also more widespread across all industries, according to the employment diffusion index, which recorded 38.4 for locals and 16.8 for foreigners.
The metric measures how widespread the job change is across all industries.
UNEMPLOYMENT RISE
Seasonally adjusted unemployment rates have skyrocketed in recent months, reaching 4.0% among citizens, 3.8% among residents, and 2.8% overall in June.
In July, it rose to 4.3% among citizens, 4.1% among residents, and 3.0% overall.
This is still below the highs of the previous recession, when the overall unemployment rate reached 3.3% in September 2009 and 4.8% in September 2003.
MOM said this is the first time it has released seasonally adjusted monthly unemployment rates and that it will do so in the future.
The increase in the resident unemployment rate was due to an increase in the number of short-term unemployed, MOM said, as the seasonally adjusted long-term unemployment rate of residents fell in June 2020 from 0.9 percent. at 0.8 percent.
Fewer job openings were also available, from 46,300 in March to 42,400 in June, while the seasonally adjusted ratio of job vacancies to unemployed fell from 0.7 in March to 0.57 in June.
However, job vacancies increased last quarter in sectors such as financial services, public administration and education, MOM said.
The ministry added that with continuing uncertainties in the world economy, as well as moderate external demand, it will continue to weigh on the labor market in the second half of this year.
He noted that the Ministry of Commerce and Industry has projected that Singapore’s GDP in 2020 will contract by between 5% and 7%.
“The weakness in the labor market is likely to persist with continued weakness in hiring and pressure on companies to withdraw,” he said.
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