SINGAPORE – Layoffs in Singapore declined for the first time in a year, while overall labour demand showed signs of cooling in the second quarter of 2023 as total employment growth slowed markedly to 23,700.
In another sign of a softening labour market, there were fewer employed residents – comprising Singaporeans and permanent residents – for the first time since the second quarter of 2020, according to preliminary labour numbers released by the Ministry of Manpower (MOM) on Thursday.
But resident employment remained well above pre-pandemic levels recorded in December 2019, MOM said.
“The contraction occurred mainly in food and beverage services (F&B) and retail trade, which is not unusual in the first half of the year,” it said.
“F&B and retail outlets typically increase hiring of temporary staff in the fourth quarter to cater for year-end festivities, and reduce their number of staff in subsequent quarters, with the easing of consumer demand.”
In contrast, there were more non-resident workers, especially in the construction sector. This comes amid sustained demand for private- and public-sector projects, such as housing, the ministry added.
Employment in the construction sector grew by 10,500 in the second quarter of 2023, picking up the pace from the previous quarter. This is mainly attributed to more work permit holders.
The ministry noted that non-residents in sectors with higher non-resident employment growth in the second quarter were typically hired for lower-paying roles.
Sectors such as community, social and personal services, financial services, and professional services saw continued resident employment growth, although growth has slowed amid global economic headwinds, said MOM.
Employment in the services sector, excluding migrant domestic workers, slowed for the third consecutive quarter, growing by 12,400 workers.
Retrenchments declined from 3,820 in the first quarter of 2023 to 3,200 in the second quarter, which the ministry said was “similar to the non-recessionary range observed in 2019, pre-pandemic”.
Business reorganisation or restructuring was the top reason for retrenchments in the second quarter, it said, adding that the services sector, especially information technology and wholesale trade, were the key contributors. Retrenchments in the services sector rose for the fourth consecutive quarter to 2,400.
However, MOM said retrenchments in manufacturing declined, following larger-scale sectoral retrenchments in the first quarter of 2023 and in the fourth quarter of 2022 – 1,470 and 1,180 workers, respectively.
“The number of retrenchments in the remaining sectors also declined or stayed broadly stable,” added the ministry.
Unemployment rates remained unchanged in June 2023 after edging up in April and May, with the overall rate at 1.9 per cent.
The June unemployment rate for residents was 2.7 per cent, and 2.8 per cent for Singaporeans.
MOM said the slowdown in total employment growth reflects the moderation in Singapore’s economic growth in previous quarters as a result of global economic headwinds. It added: “Looking ahead, firms appear to be adopting a more cautious stance towards hiring and wage increases.”
It said the proportion of companies that indicated an intention to hire in the next three months declined from 64.8 per cent in March 2023 to 58.2 per cent in June 2023.
Over the same period, the proportion of companies that plan to raise wages also dropped from 38.2 per cent to 28 per cent.
“In the near term, employment growth could ease and be uneven across industries,” MOM said.
“While tourism-related sectors are expected to see continued improvements in labour market conditions, labour demand in outward-oriented sectors such as wholesale trade and information and communications would likely dampen.”
