Job prospects in parts of the service sector are looking good this year, especially in education, health and social services.
But employment growth in outward-oriented service industries such as financial and insurance services and wholesale trade is expected to ease due to slowing external demand, said the Ministry of Manpower (MOM) yesterday in a statement on the labour market.
Meanwhile, hiring in the construction sector should see a rebound, after the sector shed workers for three consecutive years. The ministry said there should be more construction activities in the quarters ahead after a pickup in contracts awarded since the second half of 2017.
Hiring in the manufacturing sector, however, is likely to remain modest.
Overall, the labour market improved last year, according to MOM’s labour market report, with employment growth at a four-year high and retrenchments at a seven-year low.
Total employment grew by 38,300 last year, excluding maids, a reversal from 2017, when the size of the workforce shrank.
There were 10,730 workers who were laid off, down from 14,720 in 2017.
More local residents – meaning Singaporeans and permanent residents – were in jobs, and their annual average unemployment and long-term unemployment rates fell slightly, compared with the year before.
However, this was mainly thanks to the good performance in the first nine months of the year.
The fourth quarter saw an uptick in the seasonally-adjusted unemployment rate for local residents to 3 per cent, up from 2.9 per cent in the third quarter.
The overall rate including foreigners was 2.2 per cent, up from 2.1 per cent.
The resident long-term unemployment rate, which is the share of residents who were unemployed for at least 25 weeks, in the last quarter also rose to 0.8 per cent, up from 0.6 per cent.
“These are signs that structural challenges will continue to confront us,” said National Trades Union Congress assistant secretary-general Patrick Tay.
GDP growth started moderating in the second half of last year, and we’ll probably continue to see further softening this year.
DBS SENIOR ECONOMIST IRVIN SEAH
Observers say the labour market picture in the year ahead may not be as rosy as last year’s, due to global uncertainties.
“GDP growth started moderating in the second half of last year, and we’ll probably continue to see further softening this year,” said DBS senior economist Irvin Seah.
Growth led by service sector
All of the employment growth last year came from the service sector, which added a net of 47,800 workers, excluding maids. The number of workers in manufacturing and construction continued to fall.
The majority, or 65 per cent, of the additional service workers were Singaporeans and permanent residents.
But the growth in the foreign service workforce has also been significant. Finance Minister Heng Swee Keat said in the Budget statement last month that the number of S Pass and work permit holders in services rose by about 3 per cent a year, or 34,000 in the past three years.
The increase in the number of S Pass holders in services last year was the highest in five years.
These trends may be unsustainable, Mr Heng noted, which is why the sector’s Dependency Ratio Ceiling – the proportion of work permit or S Pass holders a firm can employ – is being cut from 40 per cent to 35 per cent over the next two years.
MOM said this change “will help to keep the labour market tight to sustain the impetus for restructuring, and support good employment outcomes for Singaporeans”.
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