Skip to main content

Statement on Labour Market Developments


  1. In the first half of 2016, employment growth remained low, while unemployment and redundancies have risen. This reflects the subdued external economic environment, the continued restructuring of the economy, and structural slowing of our local labour force growth.

    Review of First Half of 2016


    Unemployment rose for residents in June 2016, after declining in March 2016
  2. After declining in March 2016, the seasonally-adjusted unemployment rate for residents rose (2.7% to 3.0%) in June 2016, comparable to the rate in December 2015 (2.9%).1 On a non-seasonally adjusted basis, the resident long-term unemployment rate though remaining low, has risen from 0.7% in June 2015 to 0.8% in June 2016.

    Total employment grew at a slower pace than 2013 and 2014
  3. Total employment (excluding Foreign Domestic Workers (FDW)) grew by 11,600 in 1H 2016, reversing the decline in 1H 2015, but significantly lower than the growth in the same period in 2013 and 2014. The moderation in total employment growth took place amid subdued global economic conditions and modest growth outlook.

    Local employment remained flat, compared to a decline in 1H 2015
  4. Local employment remained flat in 1H 2016 (-200), compared to a decline in 1H 2015 (-8,900) (Figure A). Local employment in June 2016 was 0.4% higher than June 2015. The increase was comparable to the 0.3% growth in June 2015, but significantly lower than the growth of about 4.0% in June 2013 and June 2014.

  5. The slower local employment growth since 2015 reflects both structural factors and cyclical effects. Structurally, growth of the local working-age population is slowing, due to smaller cohorts of younger locals entering the workforce, and more “baby boomers” retiring. The resident Labour Force Participation Rate is already high compared to many other countries, with limited upside.2 Due to these factors, local employment growth is expected to continue to be modest.
  6. Apart from structural factors, local employment growth since 2015 has been further weighed down by cyclical weakness in the economy due to the subdued global economic conditions, with the impact varied across sectors. Local employment declines in some sectors such as Manufacturing offset local employment growth in other sectors such as Community, Social & Personal Services and Transportation & Storage, resulting in flat local employment.
    1. For 1H 2016, the declines continued to be mainly in the sectors such as Manufacturing which saw sluggish performance of the transport engineering cluster amidst sustained low oil prices; Retail Trade, on the back of sluggish retail sales (excluding motor vehicles); and Real Estate, amid the lacklustre property market.
    2. On the other hand, local employment continued to grow in the Community, Social & Personal Services and Transportation & Storage.
  7. Foreign employment growth continued at a moderated pace in 1H 2016 (11,800, excluding FDW) compared to the earlier part of the decade (Figure B). Growth of S Pass and Employment Pass (EP) Holders continued to stay moderated at 800 and 1,700 respectively. Most of the foreign employment growth in 1H 2016 were of Work Permit Holders (WPH; 9,300), notably in Food & Beverage Services and Administrative & Support Services. A significant number were employed as cleaners, security guards and kitchen assistants. The growth of WPH corresponded to a net shift in local workers away from lower-paying jobs, as the bulk of retiring workers had a lower education profile compared to younger cohorts entering the workforce.

    Redundancies and Job Vacancies3

    Redundancies continued its upward trend since 2010
  8. 4,800 workers were made redundant in 2Q 2016, up slightly from 4,710 in 1Q 2016, and the highest second quarter redundancies since 2009. Fewer residents (45%) made redundant in 1Q 2016 re-entered employment by June 2016, a slight decline from 46% in the previous quarter and the lowest since June 2009.

    Broad-based decline in job vacancies amid subdued global economic conditions
  9. Amid subdued global economic conditions, job vacancies fell for the sixth consecutive quarter to 49,400 in June 2016 (from 50,000 in March 2016). The decline was broad-based across many sectors and occupation groups. Coupled with the increase in job seekers, the seasonally-adjusted ratio of job vacancies to unemployed persons declined to 0.93, the lowest since March 2010 (0.87).


    Broad-based income growth in 2015
  10. In 2015, the nominal median monthly income from work4 (including employer CPF contributions) of full-time employed Singaporeans increased by 6.5% over the year to $3,798, or 7.0% in real terms5. Real income growth has been broad-based and sustained over the past five years, growing by 3.0% per annum at the median and 2.9% per annum at the 20th percentile.6


    Labour productivity grew
  11. Overall labour productivity (as measured by value-added per worker) rose by 0.8% in 1H 2016 over the same period last year. This was an improvement from the 0.3% growth in 2H 2015 over 2H 2014 (Figure C). The Manufacturing and Construction sectors saw productivity growth of 4.0% and 1.5% respectively. Within the Services sector, Wholesale & Retail Trade experienced the highest productivity growth (3.3%) while Business Services (-2.7%), Other Services (-2.0%) and Information & Communications (-1.5%) sectors saw the sharpest declines in productivity.

    Sectoral Performance and Outlook

  12. Employment in the Manufacturing sector fell in 1H 2016 (-5,300), but at a slower pace compared to 2015, with declines in both local and foreign employment. Employment in the Petroleum, Chemical & Pharmaceutical Products, and Transport Equipment clusters declined, amidst sustained low oil prices. Manufacturing productivity rose by 4.0%, reversing the decline in 2015, as value-added rose by 0.3% in 1H 2016, supported by the Electronics and Biomedical Manufacturing clusters.

  13. Manufacturing Outlook. For the rest of 2016, the hiring outlook for Manufacturing remains cautious on the back of sluggish global economic conditions. In particular, the Transport Engineering cluster is likely to remain a drag on employment growth, with weak demand for oil rigs amidst sustained low oil prices.

  14. Employment growth in the Construction sector slowed in 1H 2016 (2,100) compared to the same period a year ago (1H 2015: 4,000). With Construction value-added outpacing employment growth, productivity rose by 1.5% in 1H 2016.

  15. Construction Outlook. Employment growth in the Construction sector for the whole of 2016 is expected to moderate further compared to recent years. Growth in the Construction sector slowed in 2Q 2016 from 1Q 2016, on the back of a decline in private sector construction activities. In the coming quarters, growth in the sector is also likely to weaken further, with firms becoming more pessimistic about their business outlook. As such, hiring in 2H 2016 is likely to remain modest.

  16. Services accounted for most of the employment growth in 1H 2016. Employment growth (excl. FDW) in the Services sector was 15,200 in 1H 2016, higher than the same period a year ago (1H 2015: 6,200) but lower than the high growth in 1H 2014 (46,300). Employment declined in Wholesale & Retail Trade sector, on the back of sluggish retail sales (excluding motor vehicles). However, the declines were more than offset by employment gains in Community, Social and Personal Services and Transportation & Storage sectors.
  17. Productivity in the Services sector fell by -0.6% in 1H 2016 after a brief improvement in 2H 2015. Productivity declined in sectors such as Business Services, Information & Communication, Accommodation & Food Services, Transportation & Storage and Financial & Insurance Services, but increased in Wholesale & Retail Trade. Given that employment grew in the Services sector even as productivity declined, companies need to redouble efforts to restructure towards manpower-lean, productivity-led growth.

  18. Services Outlook. While the sluggish global economic outlook could weigh on employment growth in the externally-oriented services sectors, employment growth in the domestically-oriented sectors is expected to remain firm, with a likely seasonal pickup in hiring during the year-end festive period.

    Overall Labour Market Outlook for 2016
  19. The Ministry of Trade and Industry (MTI) has narrowed the 2016 growth forecast for the Singapore economy to 1.0 – 2.0%, compared to 2.0% growth in 2015. Barring unexpected shocks in the external economy, MOM expects labour demand to remain modest in 2016. In line with the weaker global growth outlook, hiring is expected to be cautious in the Manufacturing sector, as well as other externally-oriented services sectors such as Financial & Insurance Services and Wholesale Trade.
  20. Amid subdued global economic conditions, MOM expects redundancies to continue to rise in sectors facing weak external demand and that are undergoing restructuring. On the other hand, labour supply will remain tight in domestically-oriented services sectors such as Community, Social & Personal Services and Accommodation & Food Services.

  21. Looking ahead, total workforce growth will remain moderated given the demographic trends affecting the local workforce. While cyclical factors may affect labour demand on a year-to-year basis, labour supply will be significantly lower on a secular basis compared to the earlier part of the decade. As the local workforce continues to shift to higher quality jobs due to better education and skills upgrading, businesses will need to press on with job re-design and restructuring to become more manpower-lean, as the Government continues to regulate foreign manpower inflow at a moderated pace.
  22. The Government will continue to step up efforts with tripartite partners to transform our industries, create more jobs of better quality, and help displaced workers to seize new job opportunities through various career and employment support programmes under SkillsFuture and Adapt and Grow initiatives7.


  1. Unemployment data are from Labour Market Second Quarter 2016, MOM.
  2. See detailed analysis in MOM’s Statement on Labour Market Developments (13 March 2015), Annex.
  3. Data from the Labour Market Second Quarter 2016, MOM
  4. Gross monthly income data are from Labour Market 2015, MOM.
  5. The Consumer Price Index (CPI) for all items fell by 0.5% in 2015.
  6. Deflated by Consumer Price Index – All Items at 2014 prices.
  7. Adapt and Grow was announced by Minister Lim Swee Say at the MOM Committee of Supply Debate 2016, and brings together a package of enhanced employment support initiatives, including the expansion of Professional Conversion Programme (PCP) to support those switching careers, and enhancement of the Career Support Programme (CSP) to help displaced PMETs secure a quality job with employers. More details can be found at