Fewer workers employed in Q3 but jobless rate unchanged

Science

With deepening concerns about the weak jobs market, the Ministry of Manpower's (MOM) advance labour report released on Thursday (Oct 27) showed that the total number of people employed has shrunk in the third quarter of this year, driven largely by the construction and manufacturing sectors.

The decline affected mainly work permit holders and came after slower growth in the previous two quarters, the MOM said. It was the first contraction since the first three months of last year.

Based on the MOM's preliminary estimates, the seasonally adjusted unemployment rate was unchanged from the end of the second quarter, at 2.1 per cent.

The number of layoffs eased to 4,100 in the third quarter, down from 4,800 in the previous quarter.

"However, the number of redundancies was higher than the 3,460 a year ago, amid subdued global economic conditions and internal economic restructuring," the MOM said.

Total employment fell by 3,300 compared with the second quarter. The manufacturing sector bled 3,700 workers, the eighth straight quarterly decline. Meanwhile, the construction sector experienced a sharp downward swing: After five straight quarters of growth, employment fell by 5,200 workers.

Industry players and economists attributed the construction sector woes to a slowdown in private sector projects, following the winding down or completion of major projects which were awarded several years ago such as the mega mixed-use development Tanjong Pagar Centre and the Duo Residences condominium in Bugis.

Speaking to TODAY, bosses of construction companies said that private-sector projects have been on the decline and the high costs of labour have forced them to cut their staff numbers.

Nan Guan Construction managing director Akbar Kader said that the lack of projects impinged on firms' ability to retain manpower, and this is exacerbated by the "exorbitant" cost of keeping foreign workers not only in the area of levies but also in housing, he said.

Echoing this sentiment, Unison Construction managing director Tan Soon Kian said that the slowdown in private-sector projects since the start of the year has made it necessary for firms to downsize "in line with the contract volumes in the market". His firm has shed "about 20 to 30 per cent" of its foreign construction workers since the middle of the year, while Mr Akbar's company has cut about half its workers who are work-permit holders.

Nevertheless, industry players and economists played down any long-term concerns about the sector, which is going through a cyclical trough. CIMB Private Bank economist Song Seng Wun said residential property supply would pick up in the next few years. Demand for public infrastructural construction is also gathering pace, he added, pointing to construction projects such as the upcoming port at Tuas.

Singapore Contractors Association (SCAL) president Kenneth Loo said the group hopes the slowing private-sector demand would be mitigated by public-sector projects, such as Tengah's development, although these are years down the road. "Meanwhile, the sector still needs to push for higher productivity and adoption of new technologies and innovation," he said.

Mr Rajan Krishnan, KTC Construction Group's chief executive, said he expects employment to pick up again when major contracts, such as for the PUB's deep tunnel sewerage system, are awarded in time to come. "Singapore still needs, regardless of the economic slowdown, quite a considerable amount of infrastructure," he said.

Still, OCBC Bank treasury research and strategy head Selena Ling noted that public sector projects act as a buffer and cannot be expected to "fully compensate" for the private-sector slowdown.

Overall, the decline in total employment suggested that the job market had "taken a turn for the worse", said Ms Ling. Nevertheless, she noted that Singapore's unemployment rate was low compared with other advanced economies.

Mr Vishnu Varathan, a senior economist at Mizuho Bank, said the jobs situation would stay "very weak". He noted that the services sector - the traditional driver of the Republic's economy - is struggling to create as many jobs as before. The sector added 5,700 jobs in the third quarter, compared with 7,600 in the second quarter. Ms Ling said: "Skills upgrading and reskilling efforts, as well as jobs-skills matching initiatives, will play an increasing role ahead to support the softening labour market."

Source: TODAY Online