The latest data from the Ministry of Manpower (MOM) released on 30 April 2024 shows that retrenchments in Singapore have dropped for the second consecutive quarter, indicating a positive trend in the employment landscape. At the same time, the growth in total employment has slowed down, reflecting a cooling in employment expansion. There were 4,900 total employees from January to March, down from 7,500 in the previous quarter.
The employment growth is primarily driven by Singaporeans and permanent residents (PRs). However, non-resident employment declined due to reduced labor demand in sectors like construction, caused by stricter foreign worker quotas.
Despite the slowdown in total employment growth, MOM said that the figures remain comparatively higher than the previous quarter in 2023. Additionally, there has been an uptick in applications for higher-skilled non-residents like Employment Pass holders.
Retrenchments in the first quarter also decreased to 3,000 from 3,460 at the end of 2023, with business reorganization and restructuring cited as the main reasons. MOM expects the Singapore economy to improve in 2024, which should correspondingly strengthen labor demand.
MOM surveys suggest a more robust hiring outlook, with 50.7% of companies planning to hire in the next three months. However, there might be a slowdown in wage increments, as only 26.1% of companies express intentions to raise wages.
The increase in resident employment was observed mainly in sectors like financial services, health, social services, public administration, and education. On the other hand, the decline in non-resident employment was prominent in the construction sector following adjustments to foreign worker quotas on 1 January.
“Employment growth in these sectors outweighed the seasonal declines in retail trade, food and beverage services, and accommodation following the end of the festive period,” he said.
The final data for the quarter will be released in mid-June with more detailed insights into the employment landscape, including sectoral statistics and job vacancy numbers.
“We expect Singapore’s real GDP (gross domestic product) growth to recover to 2.2% in 2024, from 2023’s muted 1.1%, driven by external-led sectors, which would boost employment growth in the second half of 2024,” said DBS Bank economist Chua Han Teng.
