Pace of creation slows to 26,500 jobs but Manpower Minister remains upbeat
THE Singapore economy continues to enjoy strong employment growth, adding 26,500 jobs in the second quarter.
The fuel for growth came overwhelmingly from the service sector, thanks to the two integrated resorts, new hotels and heartland shopping malls.
Although the pace of job creation has slowed from the first quarter, when 36,500 jobs were added, Manpower Minister Gan Kim Yong is upbeat about the outlook for the rest of the year.
'Looking ahead, unemployment appears to have broadly stabilised and the labour market outlook for 2010 is optimistic, with robust employment growth expected,' he wrote in a posting on his ministry's newly set up blog.
The overall, seasonally adjusted unemployment rate was 2.3 per cent last month, up slightly from that in March but significantly lower than the rate of 3.2 per cent a year ago.
The resident unemployment rate - among Singaporeans and permanent residents - was 3.3 per cent last month, with an estimated 87,800 residents without jobs.
Redundancies also fell across the manufacturing, construction and service sectors, from a total of 2,400 in the first quarter to 1,900 in the second quarter.
Mr Gan described the fall as 'reassuring'.
The slowdown in job creation in the second quarter as compared with the first quarter could be due more to 'tight supply, rather than soft demand', Citigroup economist Kit Wei Zheng said.
Hiring difficulties could stem from more picky job seekers and a slower inflow of foreign workers, as compared with previous years, he added.
In terms of job growth, the service sector created 27,400 jobs in the second quarter. Construction added some 1,800 jobs, while manufacturing actually lost 2,400 jobs.
Economists believe job losses in manufacturing should not be a big source of concern, given the recent strong output growth. The losses were more likely due to the ongoing restructuring of the economy, said National University of Singapore economist Shandre Thangavelu.
'It will be very interesting to see third-quarter figures, whether employers will adjust slowly or immediately to the end of Jobs Credit,' he added.
He was referring to the $4.5 billion government scheme to subsidise local worker payrolls and encourage employers not to lay off workers during the recession. The scheme ended last month.
Looking ahead, the war for talent is likely to heat up as employee turnover is increasing, said Ms Yvonne Cox, South-east Asia managing director of human resource consultancy Towers Watson.
'The service sector, in particular the hospitality and retail industries, is experiencing spikes in employee turnovers as the integrated resorts have ramped up in the last six months,' she said.
Service-sector firms are upbeat about business conditions in the second half of this year, according to a Department of Statistics survey on third-quarter business expectations released yesterday.
Among those hoping to grow their business is coffee-shop chain Ya Kun Kaya Toast, which plans to open five outlets in November. The tight labour market, however, presents problems.
Its operations manager Jimmy Ng said it faces difficulties hiring young Singaporeans and a cap on hiring foreigners.'It's a good time to expand the business now but, without staff, we cannot open new outlets,' he said.
Mr Gan addressed the issue in his ministry's blog.
As productivity gains will take some time to materialise, employers 'may need to bring in additional foreign workers this year, despite the higher levy which took effect this month', he wrote.
But he also called on employers to step up efforts to raise productivity to meet the pace of growth, innovate and 'reduce their dependence on foreign manpower'.
Source: Straits Times, 31 Jul 2010