Retrenchments rise in Singapore as manufacturing sector takes a beating: manpower ministry report

Retrenchments rose in the first quarter of this year compared to the previous quarter, due to business restructuring and reorganization, said Singapore’s Ministry of Manpower (MOM) on Thursday. Among the sectors, retrenchments were driven by the manufacturing industry, the ministry said.

A total of 3,230 workers were laid off in the first three months of this year, compared to 2,510 workers in the last quarter of 2018 and 2,320 workers the same period a year ago.

The manufacturing sector saw 1,040 workers let go for the first quarter, an increase from 380 workers in the previous quarter, primarily affecting production workers and those related to factory work in the electronics segment.

The electronics sector chalked up almost one-fifth of the retrenchments for the first quarter, at 18%, followed by wholesale trade at 16%, and transportation and storage at 10%.

Among retrenched residents, professionals, managers, executives and technicians (PMETs) continued to make up the majority at 69%. This is because they form a higher share of the workforce and are more prone to retrenchments, the MOM said.

Total employment up in Q1, supported by the services sector

Total employment in Singapore improved in the first quarter from the same quarter a year ago due to more jobs added in the services sector, the MOM said.

Excluding domestic foreign workers, total employment for the first three months of this year strengthened to 10,700 workers compared to 400 workers a year ago. However, growth in the first quarter was lower than the fourth quarter’s 14,700 workers due to the year-end seasonal high.

Employment growth in the first quarter was supported by service-oriented industries, including community, social and personal services, professional services, and financial services.

The construction sector posted the first employment gain in three years, reflecting an increase in activities in both the private and public construction sectors.

Meanwhile, employment dipped in the manufacturing sector for the second straight quarter, with the electronics cluster posting its largest employment contraction in six years.

Labour market expected to slacken as job vacancies ease

The tightness in the labour market may ease, as job vacancies declined for the first time in two years and retrenchments rose in this quarter, said the MOM.

The seasonally-adjusted number of job vacancies declined from 62,300 in December 2018 to 57,100 in March this year, the first decline after seven consecutive quarters of increase, the ministry said.

However, the number of vacancies remained higher than the 53,900 vacancies a year ago. There are also more vacancies than job seekers, the MOM said, although the ratio of job vacancies to unemployed persons dipped from 1.10 in December last year to 1.08 in March this year.

For the first quarter of this year, the Singapore economy grew by 1.2%, the lowest growth rate in almost 10 years. The reading was below the government’s earlier estimate of a 1.3% growth and missed economists’ expectations of a 1.5% increase.

Singapore is likely to slow to a growth of 1.9% this year, lagging from the 3.1% growth in 2018, as the export-oriented country faces headwinds from the renewed tensions between the United States (US) and China, a report from the Institute of Chartered Accountants in England and Wales (ICAEW) said last week.