30 April 2012

Employment Outlook, 2012

30 April 2012

Our Q1 2012 Employment Situation shows that employment growth moderated slightly in the first quarter, with unemployment increasing marginally. What does this mean?

In the past few years, our economic growth was driven mostly by labour growth. As we look back, this actually gave us a stable footing to weather the recession in 2008/2009 and it also enabled good employment prospects for our people. There was also decent real income growth in the last few years. But this came at a cost as we began to feel the strain on our physical environment as well as at a social level. As highlighted in the ESC Report in 2010, we recognized that this approach would not be sustainable given our physical limitations.  While we still need foreign manpower, we need to manage its growth and to weigh more of our efforts towards productivity-led growth. This may mean a slowdown in job growth. This is not necessarily bad, as long as unemployment also remains low.

As companies begin to adjust and adapt, we will see unemployment going up albeit slightly, even as our unemployment is still lower compared to other countries.  This is again to be expected, as companies restructure, offshore or reduce less productive activities and improve their overall productivity and profitability.  Through this transition, some workers and PMETs will be affected and therefore the Manpower Ministry together with our tripartite partners will continue to focus on helping them make the transition into other sectors and other jobs.

Furthermore, with the rise in layoffs in the fourth quarter last year, some of the workers affected could be looking for jobs after taking a break during the festivities, resulting in an increase in the labour supply in the first quarter this year.   

The good news is that layoffs have since eased to an estimate of 2,700 workers in Q1 2012, a drop from the 3,250 workers affected in the preceding quarter.

When we look at the PMET profile, it is clear that their overall number have increased significantly. Over the last decade, PMETs have experienced faster employment gains than non-PMETs and this has resulted in the share of PMETs in the resident workforce rising from 44% in 2001 to 52% in 2011.  

In terms of vulnerability to layoffs, 5.5 per 1,000 PMETs were made redundant in 2011, the second lowest since 2008.  They were in fact less vulnerable than production & related workers where 7.3 per 1,000 were affected by redundancy in 2011. However, due to the overall increase in numbers, the numbers of PMETs being made redundant, unsurprisingly, also increased

So what do we see happening to our workforce in 2012?

The services sector, which made up the bulk of the new jobs created last year, is expected to continue to lead job creation in 2012.

To meet the needs of our ageing population, the Healthcare, Eldercare and Social services will continue to generate demand for healthcare professionals, such as doctors, nurses, allied health professionals, healthcare support staff and social workers. We envisage that this would be a constant feature in our employment landscape for the years to come.

The development of 200 new childcare centres by 2013 will also generate a steady demand for childcare teachers, infant care givers and related workers. This will be a great boost for young parents.

Clearly, there will be jobs and good jobs here for Singaporeans who will be the core of our workforce. We will remain open and diverse but will need to also manage the size of the foreign workforce.

However, growth will not be uniform across all sectors and industries. We expect that as we continue to moderate foreign workforce growth, labour market will remain tight, and we should see unemployment remaining low and even lower than in most other countries. We expect to see many more job vacancies compared to the number of unemployed Singaporean job seekers.

Despite the low unemployment figures, we must remember that there is a person behind every digit. We should still endeavour to help those who do become unemployed as it affects not just the individual but his or her family as well. MOM, together with the Singapore Workforce Development Agency (WDA), e2i and the Community Development Councils (CDCS) must continue to help match those out of a job with available jobs through various means, such as helping workers transit between jobs via retraining.

On balance, while the external environment in 2012 remains somewhat uncertain, the job market is looking relatively positive for our people. We will endeavour to keep it that way.

On that note…to all our workers who have made that difference…Happy May Day!

Minister of State
Mr Tan Chuan-Jin
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