Non-resident employment in Singapore declined for the first time since the third quarter of 2021.

File photo of office workers in Singapore's central business district. (File photo: iStock)

SINGAPORE: The labour market in Singapore continued to expand in the first quarter of 2024, with total employment growth driven primarily by residents.

However, non-resident employment declined for the first time since the third quarter of 2021, according to the Ministry of Manpower (MOM) in its labour market report released on Thursday (Jun 20).

Total employment grew by 4,700 in the first quarter of the year, contributed solely by an increase of 5,500 in resident employment. The increase was driven by financial and insurance services and public administration.

However, non-residents employment fell by 800 - mainly in the construction and manufacturing sectors - as the lower Dependency Ratio Ceiling (DRC) for the construction and process sectors came into effect

The DRC refers to the maximum ratio of foreign workers to the total workforce that a company in a given sector can employ.

S Pass holders saw negative growth in the first quarter of 2024, following the increase in S Pass qualifying salaries and levies last year. 

The number of people holding work permits and other work passes went up in the first quarter of 2024, although the growth has slowed significantly from the previous quarter.

Meanwhile, EP holders experienced negative growth, registering its first decline since late 2021.

The declines in EP holders were in sectors such as information and communications and professional services, which continued to face global headwinds.

But the number of EP holders grew in other sectors such as wholesale trade and transportation and storage. MOM said that overall EP applications have picked up in tandem with the improving economic outlook.

Following the cooling labour demand last year, job vacancies grew from 79,800 last December to 81,900 in March. This reflects the improved economic prospects for this year 2024, MOM added. 

The ratio of job vacancies to unemployed people fell from 1.74 in December to 1.56 in March. It is an indication that the labour market remained tight, although the ratio has decreased consistently since its high of 2.54 in June 2022.

DECLINE IN RETRENCHMENT

The number of retrenchments continued to drop, from 3,460 in the previous quarter to 3,030, due to the decrease in retrenchments from outward-oriented sectors such as wholesale trade and electronics manufacturing.

The incidence of retrenchment also continued to fall in the first quarter, to 1.3 per 1,000 employees. This was lower than pre-pandemic levels, where the quarterly average between 2015 and 2019 was 1.7 per 1,000 employees.

"More firms continued to cite business reorganisation or restructuring in Q1 2024 (Q4 2023: 59.0 per cent; Q1 2024: 72.0 per cent) as the reason for retrenchment," MOM said.

"Nearly six in 10 or 59.4 per cent of retrenched workers were able to re-enter employment six months post-retrenchment, although the re-entry rate has dipped slightly compared to the previous quarter at 61.5 per cent."

The decline in re-entry rate was observed in the information and communications, financial and insurance services as well as professional services sectors.

UNEMPLOYMENT RATES

Unemployment rates inched up in March (overall: 2.1 per cent; resident: 3.0 per cent; citizen: 3.1 per cent) compared to the previous months but remained within the range observed during non-recessionary periods.

The resident long-term unemployment rate also remained low at 0.8 per cent. Continued increases in unemployment rates are not expected as retrenchments continued to ease.

"With an improved economic outlook for 2024, sustained increase in the number of job vacancies, increased hiring optimism among firms over the next quarter, as well as declining retrenchment numbers, we expect the labour market to continue expanding and unemployment rates to remain low," said MOM.

But it added that downside risks in the global economy remain. 

"With slowing resident workforce growth and low resident unemployment rates, continued growth in resident employment is likely to become more muted."

It added that Singapore needs to continue to attract highly skilled foreign workers to complement the resident workforce to achieve economic growth and better jobs. 

Jumadi, L. (2024, June 20). Singapore labour market expands in Q1; non-resident employment down. CNA. https://www.channelnewsasia.com/singapore/singapore-labour-market-report-q1-2024-manpower-ministry-4423346