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Labour Market, First Quarter 2009

In line with the slowing economy, total employment fell by 6,200 in Q1 2009 – the first quarterly contraction in nearly six years as the number of workers hired was lower than the number of workers who left their jobs. Falling external demand has severely affected the manufacturing sector, where employment declined by 22,100. The cutback in the manufacturing industry, along with employment losses in the external-oriented services industries, more than offset gains in the domestic-oriented services and construction sectors.

2.   Construction employment grew by 8,300, less than the gains of 10,700 in Q4 2008 and 14,500 in Q1 2008. Services as a whole added 7,500 workers in Q1 2009, which was substantially lower than the gains in Q4 2008 (17,300) and Q1 2008 (46,500). The gains in this sector came mainly from community, social & personal services (11,500), supported by public sector hirings. Real estate & leasing services (1,300), professional services (1,000) and information & communications (800) also added workers in Q1 2009. In contrast, losses were registered in services industries with external exposure, namely hotels & restaurants (-2,700), financial services (-1,900), transport & storage (-1,600), and wholesale & retail trade (-800). Details are in Table 1 of the Labour Market Report, First Quarter 2009.

3.   Amid the sharp deterioration in economic conditions, the seasonally adjusted overall unemployment rate rose to 3.3%1 in March 2009 from 2.5% in December 2008. The resident unemployment rate increased to 4.8% in March 2009 from 3.6% in December 2008. An estimated 87,900 residents were unemployed in March 2009. The seasonally adjusted figure was 95,700, a third more than the level in December 2008 (which was at 71,800) and more than double the low of 45,500 in December 2007.

4.   With unemployment on the rise for five consecutive quarters, the number of unemployed residents who had been looking for work for at least 25 weeks more than doubled to 16,600 in March 2009 from 7,500 a year ago. These long-term unemployed formed 0.8% of the resident labour force in March 2009, double the 0.4% a year ago.

5.   Redundancies2 rose to a new quarterly high of 12,760 workers in Q1 2009, comprising 10,900 retrenched workers and 1,860 workers whose contracts were terminated prematurely. This is 36% higher than the 9,410 laid off in Q4 2008, but the rate of increase has moderated from the surge of 196% from Q3 2008 to Q4 2008. Manufacturing continued to account for the majority of workers made redundant in Q1 2009, with its proportion increasing from 55% in Q4 2008 to 72% in Q1 2009 as layoffs in the sector rose sharply from 5,170 to 9,250. In contrast, redundancies in services and construction eased from 3,810 to 3,170 and 390 to 330 respectively, quarter-on-quarter. Consequently, the share of redundancies from services (25%) and construction (2.6%) in Q1 2009 were lower than in Q4 2008 (40% and 4.1% respectively).

6.   With continued economic contraction and weakness in manpower demand, CPF records show that slightly more than half (51%) of the residents retrenched in Q4 2008 were re-employed by March 2009, compared to 70% in December 2008 and 67% in March 2008. The fall in the re-employment rate over the quarter was broad-based across the demographic groups. The rates for both production & related workers (70% to 47%) and professionals, managers, executives & technicians (PMETs) (69% to 48%) fell sharply, while that for clerical, sales and service workers dipped slightly (70% to 69%).


7.   Overall, job vacancies2 fell for the third consecutive quarter to 21,000 in March 2009, down 20% from December 2008 (26,100) and 45% from March 2008 (38,200). Job openings contracted across all broad sectors and occupational groups. Sustained by the demand from community, social & personal services, PMETs formed the largest share of vacancies (55% or 11,500) in March 2009. The remaining openings were for clerical, sales & service workers (28% or 5,800) and production & transport operators, cleaners & labourers (18% or 3,700).

8.   Coupled with a significant increase in the number of job seekers, the seasonally adjusted ratio of job vacancies to unemployed persons fell to 31 openings for every 100 job seekers in March 2009. This is still above the trough of 21 openings per 100 unemployed persons in September 2003.

9.   Labour productivity declined over the year by 15% in Q1 2009, following a 12% drop in the previous quarter, reflecting the sharp fall in output. In the first three months of 2009, nominal earnings fell by 3.7% over the same period in 2008, compared with the growth of 2.4% in the preceding quarter. This is the first decline in six and a half years. Consequently, real earnings experienced a larger contraction in Q1 2009 (-5.8%) than in the preceding quarter (-2.8%), despite the easing of inflationary pressure (2.1% in Q1 2009 vs. 5.4% in Q4 2008).

10.   A net weighted 15% of services firms expect employment to fall in Q2 2009, lower than 20% in the previous quarter. Hiring sentiments in manufacturing were less favourable than in services, with a net weighted 23% of manufacturers expecting to reduce headcount in Q2 2009, lower than 28% in the previous quarter.

For More Information

11.   The report is available online on the Ministry of Manpower's website.



1The overall unemployment rate for March 2009 is revised upwards from the preliminary estimate of 3.2% released in April 2009.  The rate for residents is unchanged.

2Before 2006, data pertain to private sector establishments each with at least 25 employees.  From 2006 onwards, data also include the public sector.