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Mon, September 14, 2020 – 3:00 pm
UPDATED Monday, September 14, 2020 – 3:28 pm
EMPLOYMENT fell a record 103,500 in the second quarter of the year, a staggering four times the previous record contraction in the first quarter of 25,600, according to the Singapore Ministry of Manpower’s Labor Market Report released Monday.
But other important indicators, such as layoffs and unemployment, remained below past recessive peaks as companies took steps to save costs for an unprecedented number of workers.
To “detect changes in the employment situation in a more timely manner”, the MOM will publish unemployment rates on a monthly basis, for the first time.
Layoffs more than doubled to 8,130 in the quarter, compared to 3,220 in the first quarter. This was still below previous peaks during the dotcom bubble and the global financial crisis.
Slightly more than half of those who were reduced were PMET (professionals, managers, executives and technicians), and the incidence of downsizing increased significantly for non-PMET.
The sharp increase in layoffs came even as companies took temporary cost-saving measures to retain staff, with a record number of employees affected. In the second quarter, 43,130 employees were placed on temporary layoffs, while 38,600 were placed in a short work week. These measures likely reduced the number of layoffs, the MOM said.
Seasonally adjusted unemployment rates increased during the quarter, with an overall unemployment rate of 2.8% in June, up from 2.4% in March; the unemployment rate for residents at 3.8 percent, compared to 3.3 percent; and the unemployment rate for citizens at 4 percent, compared to 3.5 percent. But these were also below past recessive peaks.
The increase in the resident unemployment rate was due to an increase in short-term unemployment, as the seasonally adjusted long-term unemployment rate of residents declined marginally to 0.8%, from 0.9% previously .
Job vacancies fell slightly to 42,400 in June, down from 46,300 in March. Together with the increase in unemployed persons, this reduced the seasonally adjusted ratio between vacancies and unemployed persons to 0.57 in June, down from 0.71 in March.
However, some sectors saw more vacancies in the second quarter compared to the first quarter. These sectors included public administration and education, administrative and support services, as well as food and beverage services.
The sectors that experienced the greatest drops in employment during the second quarter were the most affected by the “circuit breaker” and safe distancing measures, such as construction (-13,600), food and beverage services (-22,900), trade retail (-8,000), arts, entertainment and recreation (-7,600), and administrative and support services (-7,600).
Weak external demand also affected employment in the wholesale trade (-7,900) and manufacturing (-8,900) sectors, although the electronics subsector posted an increase in employment with 1,000 more workers in the second quarter.
With the latest figures, total employment excluding foreign domestic workers contracted by 129,100 in the first half of the year. Job losses occurred disproportionately in the foreign workforce, with foreign employment falling 5.7 percent or 66,400, compared with 2.7 percent or 62,700 decline in local employment.
Business closings accounted for just 3.8 percent or 2,355 of the decline in local employment during the first half of the year.
In a statement on labor market developments, the MOM said it expects weakness in the labor market to persist, “with continued weakness in hiring and pressure on companies to withdraw.”
But he pointed to areas of strength in the economy, with growth expected for electronics and precision engineering, biomedical manufacturing, information and communications, as well as finance and insurance.
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