Labour Market, First Quarter 2008
Employment Growth Remains Strong; Unemployment Up
Employment growth remained strong in Q1 08. Amid greater economic uncertainties, unemployment rose in Mar 08 from a quarter ago, but remained lower than in Mar 07.
2. On the back of healthy economic performance, total employment grew by a record 73,200 in the quarter, compared to 62,500 in Q4 07 and 49,400 in Q1 07. Services led with employment gains of 46,500 in Q1 08. Driven by the growth in building activities, construction added 14,500 workers, continuing the rapid increase of the earlier quarters. Manufacturing posted gains of 11,800.
3. After improving to pre-Asian crisis levels in the second half of 2007, the overall unemployment rate rose from a seasonally adjusted 1.7%1
in Dec 07 to 2.0% in Mar 08, while the resident unemployment rate rose from 2.4%1
to 2.9%. Nevertheless, the unemployment rate in Mar 08 was still lower than a year ago when the rate was 2.8% (overall) and 3.8% (resident).
4. Structural unemployment remained low. In Mar 08, 0.4% of the resident labour force had been looking for work for at least 25 weeks, slightly lower than 0.5% a year ago. The number of long-term unemployed residents fell from 10,100 to 7,500 over the year, making up 15% of the resident job seekers in both periods.
5. Retrenchment rose to 2,274 in Q1 08, higher than 1,966 in the previous quarter and 1,964 in the same quarter a year ago. According to CPF records, around two in three (67%) residents retrenched in Q4 07 were re-employed by Mar 08. This was higher than 59% in Mar 07, but lower than 73% registered by the previous cohort in Dec 07.
6. The economy generated 38,200 job openings in Mar 08, higher than 37,400 in Dec 07 and 32,200 in Mar 07. The overall job vacancy rate averaged 2.5%, unchanged from Dec 07 but higher than 2.3% a year ago. The vacancy rate for professionals, managers, executives & technicians (PMETs) (2.9%) and clerical, sales & service workers (2.8%) was significantly higher than for production operators, cleaners & labourers (1.8%). With the rise in job seekers, the seasonally adjusted ratio of job vacancies to unemployed persons declined from 134 in Dec 07 to 115P
job openings for every 100 job seekers in Mar 08. This was higher than 73 per 100 job seekers in Mar 07.
7. Nominal earnings rose over the year by 11% in Q1 08, up substantially from the growth of 4.3% in the previous quarter. This was also higher than the growth of 5.5% in
Q1 07. After adjusting for higher inflation2
, the growth in real terms was 3.6%, lower than the 5.0% in Q1 07.
8. Labour productivity contracted by 2.8% over the year in Q1 08, following a 3.7% decline in the preceding quarter. Overall unit labour cost (ULC) rose for the eighth consecutive quarter, with the increase accelerating to 8.8% in Q1 08 from 6.0% in the previous quarter.
9. In summary, employment continued to expand strongly in a healthy economy, although uncertain outlook and more cautious sentiments resulted in higher unemployment rate. Amid an overall tight labour market, workers' earnings rose substantially. On the other hand, without corresponding improvement in productivity, cost pressures on businesses continued to rise.
For More Information
The report is available online
on the Ministry of Manpower's website.