Singapore labour market expands in Q2, with growth coming solely from non-residents
SINGAPORE: Singapore's labour market continued to expand in the second quarter of 2024, with the growth attributed solely to non-residents, according to latest data released on Tuesday (Sep 17).This comes as Singapore's resident employment growth rate is expected to slow down in the longer term, said Manpower Minister Tan See Leng.
Total employment grew by 11,300 in Q2 of 2024. This was more than double the increase of 4,700 in the first quarter, according to the Manpower Ministry's (MOM) latest quarterly labour market report.
Resident employment fell by 600 while non-resident employment grew by 12,000, with the latter accounting for all the increase in Q2.
Overall, in the first half of 2024, total employment grew by 16,000, with increases in both resident and non-resident employment.
Non-resident employment was driven by the growth of work permit holders in construction and manufacturing.
These were mainly in lower-skilled roles typically filled by non-residents as "residents are not keen to work in these jobs", MOM said in a press release.
For resident employment, there were seasonal declines in retail trade and administrative and support services. This happened as firms released temporary workers hired for sales, crowd management, security and administrative work.
But resident employment grew in outward-oriented sectors like financial and insurance services, information and communications and professional services.
MOM said it expected resident employment to be boosted by these sectors, as well as the Formula 1 Singapore Grand Prix and year-end festivities going forward.
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Singapore's resident employment growth rate will moderate in the longer term as the country already has a "very high" labour force participation rate, Dr Tan told reporters.Singapore's resident labour force participation rate – which looks at citizens and permanent residents aged 15 and older – is 68.6 per cent.
This is higher than all but four member countries of the Organisation for Economic Co-operation and Development (OECD): Iceland, New Zealand, Netherlands and Switzerland.
"Our challenge ahead is how we can continue to sustain a vibrant, dynamic economy that continues to create good opportunities for Singaporeans as our population ages, as our local workforce continues to shrink," said Dr Tan.
One key strategy was to continue to remain open to global talent and foreign investments, he said, stressing that these complement Singapore's resident workforce.
MOM provided more data on foreign-owned firms and employment that is usually not included in the quarterly labour market report.
Foreign-owned firms make up around one-fifth of firms in Singapore and provide jobs for nearly one-third of employed residents.
Such firms account for a disproportionate share of higher-paying jobs, providing jobs for 60 per cent of residents who earn a gross monthly income above S$12,500, said the ministry.
Foreign-owned firms also create business for local small- and medium-sized enterprises that hire the majority of resident workers, MOM added.
At the same time, the government would also continue to invest heavily in Singaporeans, who remain "at the core" of manpower policy, said Dr Tan.
"We're committed to supporting our fellow Singaporeans so that they can ... punch above their weight, and they can compete strongly amidst the rapid economic disruptions and the pace of change that we are experiencing today."
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NON-RESIDENT EMPLOYMENT
While work permit holders increased, the numbers of S Pass and employment pass (EP) holders both fell.MOM said the decline in S Pass holders, who mostly worked in manufacturing, was in line with moves in the past two years to uplift the quality of S Pass holders by reducing quotas and raising qualifying salaries and levies.
EP holders increased in administrative and support services and wholesale trade, but decreased in information and communications, professional services and financial and insurance services.
MOM said the overall number of S Pass and EP holders fell in the first half of 2024 as firms made post-pandemic workforce adjustments and adapted to policy changes to improve the quality of the foreign workforce.
"With the economy picking up, the number of higher-skilled foreign workers is expected to rebound in the medium-term, if macroeconomic conditions remain positive," said the ministry.
JOB VACANCIES AND RETRENCHMENTS
Labour demand stayed strong in Q2, with the high number of job vacancies holding steady at 81,200 in June.The labour market remained tight with job vacancies exceeding the number of unemployed people, rising to a ratio of 1.67 in June.
Unemployment rates improved in June (2.0 per cent overall, 2.7 per cent for residents and 2.8 per cent for citizens) and the resident long-term unemployment rate stayed low at 0.8 per cent.
Retrenchments rose slightly to 3,270 from 3,030 in the first quarter, with increases in financial and insurance services and wholesale trade, but remained low overall at 1.4 retrenched per 1,000 employees.
But the resident rate of re-entry to the workforce after retrenchment dipped to 55 per cent from 59.4 per cent in the previous quarter.
MOM said that based on experiences of past cohorts of retrenched workers, the re-entry rate improves significantly with time.
In the first half of 2023, more than 70 per cent of resident workers who were retrenched found employment within 12 months of losing their jobs.
Firms cited business organisation or restructuring as reasons for retrenchments.
"Retrenchments due to concerns of recession or downturn in the sector have declined, as local external demand outlook is expected to be resilient for the rest of 2024," said MOM.
The ministry said it expected labour market momentum to be sustained going forward, with wages and employment continuing to grow in tandem with economic growth.
Source: CNA/dv(gr)
