Retrenchments grew to 3,230 in Q1 over manufacturing cutbacks

High costs and industry downturn prompted more retrenchments.

About 3,230 employees were retrenched in Q1 2019, up from 2,510 in the previous quarter and 2,320 in the previous year, the Ministry of Manpower (MOM) revealed. The increase was driven by manufacturing retrenchments (from 380 to 1,040) and largely hit production and related workers from electronics.

As a result, the electronics industry formed 18% of retrenchments, followed by services industries such as wholesale trade (16%) and transportation & storage (10%).

“Whilst restructuring and reorganisation remained the main reason cited by establishments for retrenchments, there was a rise in the share of retrenchments from the previous quarter due to high costs and downturn in the industry,” MOM commented.

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Professionals, managers, executives & technicians (PMETs) continued to make up the majority (69%) of retrenched employees, as they form a higher share of the workforce, and were more prone to retrenchments.

Meanwhile, the six-month re-entry rate among retrenched residents rose for the second consecutive quarter, from 64% in Q4 2018 to 66% in Q1 2019. The increase was observed for most age, education and occupational groups, except for residents aged below 30, clerical, sales & service workers, as well as the post-secondary (non-tertiary) educated.

“Whilst PMETs and degree holders continued to observe below-average re-entry rates, their rates have trended up from the first quarter of 2018,” MOM said.

Jobless rate
Singapore’s overall unemployment rate held firm at 2.2% QoQ whilst the resident unemployment rate was unchanged at 3% QoQ. Citizen unemployment rate continued to edge up slightly from 3.1% in December 2018 to 3.2% in March 2019.

The unemployment rate rose for residents with secondary and post-secondary (non-tertiary) qualifications, MOM noted. After holding steady since June 2018, the unemployment rate amongst residents aged below 30 rose.

“This occurred as more persons in the age group entered the labour force to look for work. The unemployment rate fell or was similar to the preceding quarter for the remaining age and education groups,” MOM added.

Meanwhile, total employment (excluding foreign domestic workers (FDW)) grew by 10,700 in the first quarter of 2019, significantly higher than the same period a year ago (400). The growth was lower than the fourth quarter of 2018 following the end of festive season hiring in December.

Services was the main driver of total employment growth in the first quarter of 2019 (13,600 excluding FDW), supported by gains in community, social & personal services (5,800, nearly half from public administration & education), professional services (2,800), administrative & support services (2,200), financial services (1,600), information & communications (1,200) and transportation & storage (1,200).

Total employment also rose slightly in construction (200), a first in three years, reflecting an increase in both public and private sector construction activities. On the other hand, employment declined in manufacturing for the second consecutive quarter (-3,100), led by cutbacks in electronics (-2,000).

Labour demand
Labour demand also eased, with fewer seasonally-adjusted job vacancies in March 2019 (57,100) compared to December 2018 (62,300). There continued to be more vacancies than job seekers, although the seasonally-adjusted ratio of job vacancies to unemployed persons dipped slightly from 1.10 in December 2018 to 1.08 in March 2019.

Notably, about three in five job vacancies were PMET positions (57%). Clerical, sales & service workers (23%) and production & related workers (20%) had near equal contribution to the remaining vacancies.

Meanwhile, the seasonally-adjusted recruitment (2.3%) and resignation rates (1.8%) remained stable in the first quarter of 2019. Overall labour turnover was also unchanged over the year, though trends differed by industry.

“Increases in labour turnover were the highest in real estate services and construction, whilst the decline was more pronounced in retail trade which observed slower retail sales and is expecting less favourable business conditions in the next six months,” MOM said.

The average total weekly paid hours worked per employee was slightly lower in March 2019 (44.6 hours) than in December 2018 (44.7), due to a decline in paid overtime hours (from 2.7 to 2.6).

“Similar declines were seen over the year, and were more pronounced in construction and manufacturing (due to fabricated metal products, machinery & equipment; paper/rubber/plastic products & printing; and food, beverages & tobacco),” MOM said, adding that conversely, employees in information & communications have generally observed year-on-year increases in hours worked since March 2017.