Total employment in Singapore faced its sharpest decline on record in the second quarter of 2020, with a decline of 103,500.

This brought the total employment decline to 129,100 in the first half of 2020, according to the Labour Market Report released by the Ministry of Manpower (MOM) on Monday (Sep. 14).

Unemployment rates and the total number of retrenchments also rose, although they remain lower than past recessionary peaks.

The number of short-term unemployed are rising

According to MOM, the seasonally adjusted unemployment rates rose over the quarter, with the overall unemployment rate rising from 2.4 per cent to 2.8 per cent.

The resident unemployment rate rose from 3.3 per cent to 3.8 per cent, while the citizen unemployment rate rose from 3.5 per cent to 4 per cent.

The report stated that the rise in resident unemployment rate in Singapore was driven by an increase in the number of short-term unemployed, as the seasonally adjusted resident long-term unemployment rate has dipped in June 2020, from 0.9 per cent to 0.8 per cent.

Employment in essential sectors remain relatively stable

Total employment, excluding foreign domestic workers (FDW) fell by 103,500, which is the sharpest quarterly contraction on record.

This amounted to a fall of 3.7 per cent.

The pace of foreign employment declines was sharper at 5.7 per cent, compared to the 2.7 per cent decline among locals.

The sectors that are hardest hit by the effects of circuit breaker and safe distancing measures include the construction, food and beverage (F&B) and retail trade industries.

On the other hand, employment was relatively stable in essential services or sectors where remote work is more likely, such as information and communications, financial and insurance services, and health and social services.

According to the report, the large majority of local employment declines were not due to firm closures, with only an estimated 2,355 local employees losing their jobs in this manner.

Number of retrenchments higher than SARS period

Retrenchments in the second quarter of 2020 more than doubled to 8,130, compared to 3,220 in the first quarter of 2020.

This brought the total number of retrenchments in the first half of the year to 11,350.

Although the number of retrenched people is higher than the retrenchment figure during the SARS period, MOM said this is lower than other past recessionary peaks.

Although locals formed a greater share of retrenched employees in the first half of 2020, with 6,460 locals retrenched, MOM said that this is due to their larger workforce.

After normalising retrenchment figures by workforce size, the incidence of local retrenchments is lower than that of foreigners, with 4.9 locals retrenched per 1,000 employees, compared to 6.2 foreigners retrenched per 1,000 foreign employees.

You may see the full report here.

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