SG job market retrenchment rise, tourism and consumer sectors remain robust

Singapore’s job market recovery has shown signs of slow progression, according to Ministry of Manpower (MOM). Advance estimates show continued improvement in the labour market in the third quarter of 2022, but there are some early indications of easing in the momentum of improvement amidst slower economic growth. Total employment continued to expand robustly, surpassing its pre-pandemic level by 1.7% in September 2022. While there was a slight uptick in unemployment rates and an increase in retrenchments over the quarter, both indicators remained on par with pre-COVID levels.

Total employment (excluding migrant domestic workers) expanded by 75,600 in Q3 2022, continuing the strong growth observed in the previous quarter. Non-residents accounted for the majority of the expansion, as non-resident employment continued its rebound towards its pre-COVID level. The increase in non-resident employment was mainly in construction and manufacturing, sectors with a higher share of non-resident workers. Similar to past quarters, more residents found employment, though the pace of increase eased compared to the last quarter. Resident employment increases were mainly in outward-oriented sectors such as information and communications, professional services and financial services.

After trending down to a six-year low in August 2022, unemployment rates edged up slightly in September 2022 to 2.0% overall, 2.9% for residents and 3.1% for citizens. However, the rates remained within the pre-COVID range. The number of retrenchments increased to 1,600 in Q3 2022, from the previous quarter’s all-time low of 830.

The retrenchments were from manufacturing, mainly due to discontinuation of product lines, as well as services, mainly due to business reorganisation or restructuring.

The nation’s transition to living with COVID-19, along with the progressive removal of safe management measures and border restrictions, has supported the labour market’s recovery in recent quarters, though there are signs of a slowing momentum in Q3 2022.

In the coming months, a deteriorating global economic environment, higher global inflation, as well as geopolitical tensions, will impact the labour market. While forward-looking data shows that overall hiring sentiments among firms remain optimistic, there could be some unevenness in growth across sectors in the final quarter of 2022.

Demand in tourism- and consumer-related sectors is expected to remain robust, supported by the recovery of international visitor arrivals and year-end festive hiring.

In contrast, trade-reliant sectors such as manufacturing could experience more subdued employment growth as external demand weakens. Non-resident employment is expected to continue to recover, as employers backfill their vacancies.

The proportion of firms which intend to raise wages in the next three months held steady, suggesting that firms remain prudent about raising wages. The risk of a wage-price spiral hence remains low for now. For wage growth to be sustainable, wages should rise in tandem only with improvements in workers’ productivity and skills.

MOM encourages employers and workers to make full use of government programmes to adapt to the changing economic environment and accelerate the pace of transformation. There were plenty of job openings for the past six months from April. Marketing executives (13%), digital marketers (10%) and marketing interns (5.4%) dominated the local marketing job scene, while roles such as graphic designers (23%), digital transformation consultants (6.7%) and communications interns (5.9%) dominated the media and communications industry.

According to Indeed, hiring activity in Singapore continued to rise despite the pandemic. In February 2022, Singapore job postings on Indeed were doubled (+106%) that from pre-pandemic levels (1 February 2020).

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