Singapore job losses highest in more than a decade

Singapore job losses highest in more than a decade

More Singaporeans are unemployed now than at any time before in the last five years. The jobless rate for Singaporeans and permanent residents hit a five-year high of 4.8 percent in March up from 3.6 percent in December, according to the Ministry of Manpower.

The overall unemployment rate, which includes foreign workers in Singapore, rose from 2.5 percent in December to 3.2 percent in March.

More than 12,000 jobs were lost in the first quarter which ended in March – the highest in more than a decade, according to Ministry of Manpower figures going back to the Asian financial crisis in 1998.

But that's not the biggest news at the moment as far as one local radio station is concerned, which is giving more coverage to the swine flu which has not yet broken out in Singapore.

Singapore's Channel NewsAsia website goes one better. It doesn't even have any reports on uenemployment or joblessness in Singapore at 1.30 pm today! A site search only turned up what labour chief Lim Swee Say had to say two days ago! And nothing about the Manpower Ministry report today!

But here's the hard news.

Employers retrenched 10,800 workers, and another 1,800 were released from their contracts early, bringing total job cuts to 12,600 in the first quarter ended in March – up from 9,410 in the last quarter which ended in December.

That's 3,000 more than the 8,890 jobs lost in the fourth quarter of 2001, the year of 9/11 and the dot-com bust, the previous worst quarterly figure for job losses.

The economy shrank a record 19.7 percent between January and March.

Some 9,000 electronics workers lost their jobs, another 2,900 workers were laid off from services and 700 from construction.

The ministry says these are only preliminary estimates.

Worryingly, it says not enough new jobs are being created to make up for the job losses.

The ministry says:

Falling external demand has severely affected the manufacturing sector where employment declined by 19,900, deeper than the 7,000 loss in the earlier quarter. Supported by a strong pipeline of building projects, construction employment grew by 8,500 in the first quarter of 2009, but lower than the gains in the earlier quarters. Services added 10,300 workers, substantially lower than before.

But it's hardly headline news as far as the Singapore radio station 93.8 is concerned. Top of the news this morning was what Deputy Prime Minister and Home Minister Wong Kan Seng had to say about what businesses should do if the swine flu breaks out in Singapore and, no, the government is not planning to close the borders as yet. The job losses were reported only at the end of the news bulletin.

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Worst may be over, but brace for more job losses: MAS

Worst may be over, but brace for more job losses: MAS

The Monetary Authority of Singapore says the worst may be over for Singapore's economy which recorded its sharpest drop – a staggering 19.7 percent slump – in the first quarter of this year .

But there's no reason to cheer yet. The central bank foresees more job losses and several false starts before the economy actually picks up. The only certainty is it isn't going to happen this year.

By the end of the year, "net employment, excluding construction, could fall by more than the 19,800 job losses recorded during the Asian Financial Crisis in 1998".

Don't blame the government, please.

As the central bank rightly says, Singapore is so export-oriented the health of its economy depends on the world at large. So if the economy doesn't get better, you know where the problem lies. Not in Singapore.

"Almost 60% of our exports are destined for economies that are expected to be in outright recession in 2009," says the MAS.

It cites another reason why the economic outlook is so uncertain -- the swine flu outbreak. It's too early to tell how far the disease will spread and what the economic effect will be.

Really, now is not the right time to expect rock-solid economic forecasts.

But the central bank had to come out with its half-yearly review and so it ends up saying why the economic outlook is so hard to read at the moment beyond this woeful certainty:

The domestic economy is not expected to stage a decisive rebound this year.

Recovery is likely to be slow and gradual unlike in previous downturns and there could be several "false starts", says the MAS Macroeconomic Review released today.

The good news is the Singapore economy, being "extremely open", will "pick up more strongly than other countries when the global recovery eventually gets underway".

But the situation now is uniformly gloomy. The Review says:

* The employment outlook has weakened.
* Job losses will be concentrated in the manufacturing and trade-related sectors. Employment prospects for most manufacturing and trade‐related industries have dimmed significantly. Indeed, severe job losses could be expected given the deepening global recession and its impact on regional trade flows.
* Wage growth will moderate significantly.
* The electronics and chemicals clusters remain weak.
* The air cargo segment remains grounded on a weak IT outlook. A supply overhang looms over the container shipping industry.
* Prospects for the domestic financial sector remain weak in the near term.
* There is slower lending activity. Domestic non‐bank credit declined for the fourth consecutive month in February, as business loans weakened in line with the broader economic slowdown.
* Increases in building and construction loans have levelled off.
* The rest of the economy could see further downward adjustments.

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