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Labour Market Report: 1Q 2023 sees sluggish employment growth and an increase in retrenchments

The retrenchment increase was largely seen in Electronics Manufacturing, Information & Communications and Financial Services.
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By Ian Tan Hanhonn 15 Jun 2023
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Due to “weakening global demand and headwinds in certain industries such as electronics manufacturing and restructuring/consolidation in the ICT space,” retrenchments are expected to continue for the remainder of 2023, said NTUC Assistant Secretary-General Patrick Tay.


He shared his opinion on Facebook shortly after the Ministry of Manpower (MOM) released the labour market report for the year’s first quarter on 15 June 2023.


Mr Tay added that NTUC would continue to monitor the re-entry rate into the employment of those unemployed or retrenched. He cautioned that structural challenges such as skills and job disparities remain one of the main causes of unemployment in Singapore for both the short and medium term.


“We need to double down our efforts and build on our momentum to promote and encourage skills upgrading and acquisition to stay ready, relevant and resilient [such as through the NTUC Company Training Committees] and ensure our training efforts cater to the needs of the job market through speed to market programmes which are relevant to the in-demand jobs/skills,” he wrote.


Moderate employment growth


According to the report, total employment grew by 33,000 in the year’s first quarter. The number excludes migrant domestic workers.


This was a smaller increase compared to the previous quarter of 43,500.


Resident and non-resident employment grew by 2,800 and 30,200 in Q1 2023, a sharp drop compared to the 8,400 and 31,100 numbers seen in the previous quarter.


MOM referenced weaker external demand outlook and downside risks in the global economy as the reason for the moderate growth in employment.


The ministry also noted that total employment was still 3.8 per cent higher than in the last quarter of 2019, before the onset of the COVID-19 pandemic.


Resident employment growth for Q1 2023 was largely seen in the financial services, public administration and education, professional services, and health and social services sectors.


Non-resident growth was mainly due to hiring in the construction and manufacturing sectors.


Retrenchments creep up


Retrenchments increased to 3,820 in 1Q 2023, up from 2,990 in 4Q 2022.


The increases were mainly seen in the electronics manufacturing (from 670 to 1,190), information and communications (from 370 to 560) and financial services (from 260 to 540) sectors.


Retrenchments in other sectors remain stable, according to the report.


Some 47.7 per cent of the retrenchments cited reorganisation or restructuring as the main reason for retrenchments, with 19.4 per cent citing recession or downturn as the main cause.


The labour market report also stated that 71.7 per cent of resident workers who were retrenched in Q3 2023 found new employment within six months.


Fewer jobs available, but vacancies remain


Job vacancies continued to decline for the fourth quarter in Q1 2023. By March 2023, there were 99,600 job vacancies, compared to 126,000 in March 2022.


The vacancies were spread across different industries, mainly in growth industries such as information and communications, health and social services, professional services and financial services.