Fewer jobs were created and more workers were laid off in the third quarter of the year, even as the overall unemployment rate dipped slightly and continues to remain low. But analysts say the labour market is still strong in the face of an economic slowdown.
New jobs created in the third quarter dropped some 21 per cent to 24,900, down from the 31,700 of the previous quarter, according to a report released on Oct 31 by the Ministry of Manpower.
On a year-on-year basis, new job creation fell 22 per cent from 31,900, said the Employment Situation, Third Quarter 2012 report.
The seasonally-adjusted overall unemployment rate dipped to 1.9 per cent in September, from 2 per cent a quarter ago. Unemployment rates for Singapore residents and citizens remained unchanged at 2.8 per cent and 3 per cent respectively, said the report.
The report showed that job growth in the third quarter of this year fell most steeply in the services sector. Only about 11,300 new jobs were created, compared to 17,300 in the previous quarter. In the same period last year, 21,200 jobs were created.
Economists said this was unsurprising. This is because previous large-scale hiring for projects involving the integrated resorts has subsided and the services sector’s contribution to Singapore’s economic growth has barely grown over the past two quarters and will remain lacklustre next year. And overall inflation expectations remain unchanged at slightly above 4.5 per cent this year, and at 3.5 to 4.5 per cent in 2013.
Price pressures next year will come from housing, cars, food and services, the Monetary Authority of Singapore (MAS) said in its half-yearly macroeconomic review on Oct 30.
But it said the job market will remain tight and resident wage growth could rise from 2 per cent to 3 per cent this year – and to above 3 per cent next year – even if overall economic growth remains sluggish.
Gross domestic product growth “is likely to be positive though below-trend next year”, while inflation could be 4.5 per cent early next year before moderating to around 3.5 per cent in the fourth quarter.
The Government’s most recent forecast was for prices to grow 4 per cent to 4.5 per cent this year, already higher than the 2.5 to 3.5 per cent outlook for inflation given earlier.
For this year, MAS is sticking to its projection that the economy will grow between 1.5 per cent and 2.5 per cent, down from 4.9 per cent last year and below the growth trend of 3 per cent to 5 per cent.
MAS said that while sectors such as manufacturing have suffered from the weakness in Europe and the slowdown in China, domestic sectors remained buoyant, with a large number of ongoing projects.
These include the building of more homes, MRT lines, hospitals, nursing homes and a new airport terminal.
Via – AsiaOne