In the third quarter of 2023, Singapore witnessed a notable increase in retrenchments and a continuing decline in job vacancies, reflecting a cooling labor market amidst global economic challenges.
Escalating Retrenchments
The Ministry of Manpower’s (MOM) latest labor market report revealed an increase in retrenchments from 3,200 in Q2 to 4,110 in Q3. The wholesale trade sector was particularly affected, with retrenchments rising from 480 to 1,270. The majority of these job losses were attributed to business reorganization and restructuring, with a growing number of firms citing business and cost concerns as the primary reasons.
Positive Note on Reemployment
Despite the rise in retrenchments, there was a silver lining. The percentage of retrenched residents who found new employment within six months increased to 65.3% in Q3, up from 59.4% in the previous quarter. This indicates a resilient reemployment landscape for Singaporeans and permanent residents.
Cooling Labor Demand
Job vacancies continued their downward trajectory for the sixth consecutive quarter, dropping from 87,900 in June to 78,400 in September. This decline, ongoing since its peak in March 2022, reflects the broader cooling of labor demand in the country. However, growth sectors such as information and communications, health and social services, professional services, and financial and insurance services still accounted for a significant portion of job vacancies.
Tight Labor Market
Despite the drop in job vacancies, the labor market remains tight, with the number of job openings still surpassing the number of unemployed individuals. The job vacancy to unemployed person ratio stood at 1.58 in September, a decrease from 1.94 in June.
Employment Trends
Total employment, excluding migrant domestic workers, rose by 23,600 in Q3, marking the eighth consecutive quarter of employment growth, albeit at a slower rate than before. Notably, resident employment saw an upturn, primarily driven by growth sectors, while non-resident employment continued to increase, with significant contributions from the construction, administrative and support services, and food and beverage services sectors.
Unemployment Rates
Unemployment rates remained relatively low in October, with the overall rate at 1.9%, and the resident and citizen unemployment rates at 2.7% and 2.9%, respectively. However, the resident long-term unemployment rate experienced a slight increase from 0.5% in June to 0.7% in September.
Conclusion
The latest MOM report highlights the challenges facing Singapore’s labor market, with rising retrenchments and falling job vacancies signaling a period of economic adjustment. However, the resilience in reemployment rates and the continued demand in growth sectors provide a cautiously optimistic outlook for the country’s labor landscape.
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