Lay-offs in first half of year highest since 2009

September 19, 201610:18 am299 views
Lay-offs in first half of year highest since 2009
photo: Reuters file photo

More than 9,500 people were laid off from their jobs in the first six months of this year — the highest since 2009 — as the unemployment rate continued to creep up.

The Ministry of Manpower’s labour market report for the second quarter, which was released on Thursday (Sept 15), also showed that, for the first time since June 2012, there were more people looking for work than the number of vacancies available.

Economists said that as companies remain cautious in hiring, the bleak employment situation was likely to persist in the months ahead and job vacancies could continue to slide.

Seasonally adjusted, there were 93 job openings for every 100 job seekers at the end of the second quarter of the year.

The number of job vacancies also dipped to 49,400, compared with 50,000 at the end of the first quarter – a sixth straight quarterly decline.

From April to June, a total of 4,800 workers were laid off, up from 4,710 in the first three months of the year.

In the first half of the year, professionals, managers, executives and technicians (PMETs) made up nearly six in 10 — or about 56 per cent — of layoffs. Overall, the seasonally-adjusted unemployment rate rose to 2.1 per cent in June, from 1.9 per cent in March. The unemployment rate for Singaporeans increased from 2.6 per cent to 3.1 per cent over the same period, while that for citizens and permanent residents went up from 2.7 per cent to 3 per cent.

The long-term unemployment rate for residents — those jobless for at least 25 weeks — crept up from 0.7 per cent in June last year to 0.8 per cent in June this year, the highest since 2010. The rise was “more pronounced among those aged 40 and over, and among degree-holders”, MOM said. For example, the long-term unemployment rate among those aged 40 to 49 increased from 0.6 per cent to 0.9 per cent in that period. The rate for those below 30 was unchanged at 0.6 per cent while the figure for those between 30 and 39 inched up from 0.5 per cent to 0.6 per cent.

Meanwhile, compared with March, PMETs and degree-holders had greater difficulty re-entering the workforce in June. Over this period, the rate of re-entry for PMETs fell from 42.5 per cent to 39.6 per cent, while that for degree-holders dipped from 41.7 per cent to 40.1 per cent.

In the second quarter, the total number of people in employment grew by 4,200, compared with an increase of 13,000 in the first quarter.

MOM said local employment fell by 200 in the first half of the year, although this was significantly lower than the decline of 8,900 seen in the same period last year.

CIMB Private Bank economist Song Seng Wun noted that while some sectors, such as community, social and personal services, continued to be “resilient”, Singaporeans were still “quite reluctant” to venture into them.

West Coast Member of Parliament Patrick Tay, who also chairs the Government Parliamentary Committee for Manpower, said PMEs found it harder to re-enter the market because they may lack the skills and experience to fill openings. He noted that redundancy figures should take into account what he terms “disguised retrenchments” – layoffs masked as voluntary resignation, for instance – to reflect the full picture. There have been such cases in various sectors, mostly in non-unionised firms, although he noted that they were “in small numbers”.

Ms Selena Ling, OCBC Bank’s treasury research and strategy head, said global economic headwinds and sluggish domestic growth meant the drop in the number of vacancies was “a matter of time”. While this could continue in the months to come amid uncertainties triggered by factors including the current Zika outbreak in Singapore, Ms Ling said there were “pockets of growth” in sectors such as transportation and storage in the first half of the year.

As the labour market is a “lagging indicator” of the economy’s health, United Overseas Bank economist Francis Tan said the slowdown in economic growth in the first half of the year would translate into fewer job vacancies in the latter half. Singapore’s gross domestic product (GDP) is forecast to grow at a slower pace of 1 to 2 per cent this year.

The sectors at greatest risk, said Mr Song, included offshore and marine, which has been hit by low oil prices, and financial services, where lenders find it a challenge turning profits in a “low-interest-rate environment”. Others likely to be hit hard include manufacturing, wholesale and retail, and oil and gas, the economists said.

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