Drop in job growth due to seasonal decline, labour market restructuring: Lim Swee Say

Even though there was a decline of 6,100 jobs in first quarter 2015, compared to year ago, there are still “many more jobs available” in Q1 2015 compared to a year ago in first quarter 2014, says Manpower Minister Lim Swee Say.

Seasonal declines and sharper moderation of growth in the manufacturing and construction sectors were among some of the reasons total employment in Singapore fell by 6,100 in the first quarter of 2015.

Parts of the services, retail, real estate services, accommodation and food service sectors also contributed to this decline, said Manpower Minister Lim Swee Say in Parliament on Monday (Jul 13).

This was in response to questions posed by Non-Constituency Member of Parliament Gerald Giam on the factors behind the fall in job growth from 28,300 jobs in Q1 2014 and 40,700 jobs in Q4 2014, to just 300 jobs in Q1 2015. Mr Giam also asked what implications this fall would have on Singapore’s economy.

Mr Lim said the moderation in employment growth needed to be seen in the context of Singapore’s labour market and the repositioning of its economy: Firstly, that the employment rate continued to see a sustained increase to a high of 79.7 per cent in 2014, while unemployment remains among the lowest in the world.

Given these factors, he said local workforce growth going forward would slow down.

Secondly, that job vacancies continue to remain high and outnumber job seekers, with the seasonally-adjusted ratio of job vacancies to unemployed persons remaining stable at 143 openings per 100,000 job seekers in March 2015 compared to 142 in December 2014.

Lastly, the move towards a more manpower-lean economy to sustain growth that relies less on low-skilled foreign manpower, while upgrading the skills of local manpower, productivity and innovation.

He added that the drop was observed at a single point, and needed to be observed over several quarters before a definite conclusion could be made.

“I would not draw any conclusion just based on one single point. At the same time, I want to emphasise that even though with a decline of 6,100 jobs in first quarter 2015, compared to year ago, there are still many more jobs available in Q1 2015 compared to a year ago in first quarter 2014,” said Mr Lim.

“In fact the increase over this, year on year, was about 2.7 per cent – almost 90,000 jobs. So therefore job deficit is not the issue facing us today. (The) job market is still growing on a year-to-year basis.”

Mr Lim added that with restructuring stepped up, Singapore can expect job growth to slow down even further, cutting across all sectors.

“We do notice that for the manufacturing sector, which is an export-oriented sector, the pace of restructuring is a lot faster,” said Mr Lim.

“As a result, the manufacturing sector has become a lot more manpower lean compared to the services sector. But for the service sector, both the tradable and non-tradable sectors are both taking in more manpower on the whole – not on a quarterly basis – but if you look at it over the last one year.”

He also disagreed that this could be seen as a warning sign that manpower constraints were overtightened.

“What we’ve done was actually to slow down the growth, but at the same time manage the process of transition that in a way would hopefully will enable more and more companies, especially SMES, to adapt, to grow. Because it’s not to our interest to see a sudden drop, and to see a sudden decline in our economic activities in Singapore,” said Mr Lim.

He agreed that non-tradable sectors of the economy faced greater constraints with manpower, and that the Ministry has been working with some companies in these sectors to help them assess their present position, where they ought to be three years from now, and what kind of assistance they would require, such as financial grants. He added that going back to the older model – heavily depen dent on foreign Work Permit holders – was not sustainable.

“MOM is working closely with SPRING, with the relevant agencies, basically for ways to help them to go through this transition. In other words, to go back to the past is not the solution, because it just pushes us back in our push for repositioning. But looking forward, certainly we’re going to continue to be creative, continue to find win-win outcomes for the agencies, for the companies and for the unions as well,” said Mr Lim.

While employment data for the Q2 2015 is not yet available, Mr Lim said the ministry will monitoring employment trends closely in the coming quarters.

news source & image credits: channelnewsasia.com

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