Labour Market, Second Quarter 2009
Unemployment stabilises – fewer redundancies and more job openings
After declining by 6,200 in Q1 09, total employment fell for the second consecutive quarter in Q2 09 by 7,700. Manufacturing shed workers for the third straight quarter (-15,900), but the losses have moderated from the previous quarter (-22,100). Construction (4,700) and services (3,800) employment continued to rise in Q2 09, but at a slower pace.
2. The gains in the services sector continued to be led by community, social & personal services (7,100). Administrative & support services (1,700) and real estate & leasing services (1,200) also added workers in Q2 09. In contrast, services industries with external exposure (e.g. in terms of international trade and visitor arrivals) namely hotels & restaurants (-2,500), transport & storage (-1,900), wholesale & retail trade (-900) and financial services (-800) continued to shed workers.
3. The overall unemployment rate stabilised at a seasonally adjusted 3.3% in June 09, unchanged from a quarter ago. Among the resident labour force, the seasonally adjusted unemployment rate declined to 4.6% in June 09 from 4.8% in March 09 as more people deferred job search and pursued courses, including those supported under SPUR. Some 116,300 residents were unemployed in June 09. The seasonally adjusted figure was 91,500, slightly lower than 95,800 in Mar 09.
4. With unemployment rising for five quarters before stabilising in June 09, long-term unemployment has worsened. The resident long-term unemployment rate rose from 0.5% in June 08 to 1.3% in June 09, a four-year high for June periods. Some 25,800 or 22% of resident job seekers had been looking for work for at least 25 weeks in June 09, up from 9,500 or 12% a year ago. At its peak, there were 30,600 long-term unemployed residents constituting 32% of the unemployed and 1.8% of the labour force in June 02.
5. 5,980 workers were made redundant in Q2 09, of whom 5,170 were retrenched and 810 were released prematurely from their contracts
1. Redundancies fell by more than half from the peak of 12,760 in Q1 09. The improvement largely reflected the sharp fall in redundancies in manufacturing from 9,250 in Q1 09 to 2,900 in Q2 09. Services (2,850) and construction (230) also laid-off fewer workers in Q2 09 than in the previous quarter (3,170 and 330 respectively). As manufacturing accounted for over 90% of the decrease, the proportion of workers made redundant from manufacturing shrank from 72% to 48%, while the share coming from services increased from 25% to 48% and construction from 2.6% to 3.9%.
6. The re-employment rate fell to a new low
2, reflecting the weak job market. Based on CPF records, 43% of the residents retrenched in Q1 09 were re-employed by June 09. The deterioration in re-employment prospects over the quarter was broad-based. Those retrenched from clerical, sales & service jobs experienced the largest drop in re-employment rate, after holding up in Q1 09. Their re-employment rate at 51% was still higher than 42% for professionals, managers, executives & technicians and 43% for production & related workers.
7. Job vacancies
1 rose by 17% over the quarter to 24,500 in June 09, but was 39% below the 40,100 a year ago. After adjusting for seasonality, total job vacancies increased by 8.0% in June 09 from three months ago, after four quarters of decline. Coupled with stabilising unemployment, the ratio of job vacancies to unemployed persons increased slightly over the quarter from a seasonally adjusted 31 to 33 openings per 100 job seekers in June 09. This was the first increase after five straight quarters of decline.
8. Labour productivity declined over the year by 6.2% in Q2 09, easing from the 15% contraction in Q1 09. Over the same period, nominal earnings fell by 2.2% in Q2 09, following Q1 09's decline of 3.7%. After adjusting for negative inflation in Q2 09 (-0.5%, vs. 2.1% in Q1 09), the decline in real earnings (-1.8%) moderated from the previous quarter (-5.8%).
9. Overall unit labour cost (ULC) rose for the thirteenth straight quarter. However, the increase moderated to 2.1% in Q2 09 from 9.9% in the previous quarter. Reflecting the improvement in manufacturing labour productivity, the ULC in this sector fell by 7.0%, reversing from the increase of 28% in Q1 09. Driven by the declines in manufacturing ULC and service costs, the unit business cost (UBC) in manufacturing fell by 6.5% in Q2 09, after twelve consecutive quarters of increase.
10. In summary, the deterioration in labour market appeared to have stabilised, as significantly fewer workers were made redundant and job openings rose after four quarters of decline. The unemployment rate held steady following five straight quarters of increase, as more people deferred job search and pursued courses. Meanwhile, cost pressures have eased as earnings continued to decline and productivity fell less sharply than before. On the other hand, a record low proportion of workers retrenched secured re-employment and long-term unemployment has worsened, indicating that the labour market was still weak.
For More Information
11. The reports are available on the
MOM Statistics Publications page.
1Data pertain to private sector establishments each with at least 25 employees and the public sector.
2The data series on re-employment rate of retrenched residents started from Jun 1995. Before 2007, data pertain to residents retrenched from private sector establishments each with at least 25 employees. From 2007 onwards, data also include residents retrenched from the public sector.
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