Unemployment and redundancies in services sector loom amid weak economy
It accounts for almost three-fourths of the workforce.
The negative effects of a slowdown in the external environment, as well as the spillovers from the weak manufacturing sector, had become more significant for Singapore’s services sector as trade-related services sectors and financial services activities pulled back, cautioned UOB.
According to UOB, being the largest employer accounting for 72% of the workforce, prolonged slowdown in the services sector will imply even higher labour redundancies and unemployment rates as we start crystal-balling into 2017.
Singapore’s advance estimates of 3Q 2016 GDP growth registered 0.6% y/y, worse than onsensus estimates of a 1.7% y/y growth.
On a q/q SAAR basis, GDP pulled back 4.1%.
The sequential slowdown in 3Q GDP growth was mainly due to the 17.4% q/q SAAR contraction in the manufacturing sector, as well as a 1.9% q/q SAAR contraction in the services sector.
The manufacturing sector remained weighed down by a decline in the output of the transport engineering, biomedical manufacturing and general manufacturing clusters.
The construction sector expanded marginally by 0.5% q/q SAAR.
On the y/y basis, the manufacturing sector fell 1.1%, reversing the 1.4% gain in 2Q.
The services sector also contracted 0.1% y/y, the first contraction since the global financial crisis, while the construction sector gained 2.5% y/y.