Despite a slight uptick in unemployment, employment prospects remain relatively stable for the second half of 2023
Singapore’s labour market showed signs of cooling in the second quarter of 2023, with a moderation in employment growth and job vacancies. According to the Ministry of Manpower (MOM), resident employment fell for the first time since Q2 2020, by 1,200 workers. However, the decrease was attributed to seasonal factors, with a rebound expected in the second half of the year.
The drop in resident employment was largely driven by the end of seasonal hiring in the food and beverage services and retail trade sectors. Meanwhile, non-resident employment increased by 25,500, with construction accounting for a significant portion of this growth.
Despite the cooling labour market, the overall employment situation remains relatively stable. Total employment, excluding migrant domestic workers, continued to rise for the seventh consecutive quarter, albeit at a slower pace than in Q1 2023. Job vacancies also decreased for the fifth consecutive quarter, falling to 87,900 in June 2023, after peaking in March 2022.
OCBC’s chief economist, Selena Ling, noted that the contraction in resident employment was specific to certain industries and not indicative of a broader economic downturn. MOM also pointed out that sectors like community services, social services, and financial services experienced robust growth, while sectors like food services and retail faced temporary setbacks due to the end of seasonal hiring.
Looking ahead, the demand for labour is expected to soften further, especially in outward-oriented sectors such as manufacturing and finance. However, the recovery in the tourism sector, including air transport and accommodation, is expected to support job growth in consumer-facing industries.
While retrenchments declined in Q2 2023, concerns remain over the employment prospects of older workers, particularly those aged 60 and above. As the labour market adjusts to a cooling economy, retrenchments may rise slightly in the coming quarters, though overall unemployment rates remain relatively low.
In response to the evolving labour market, MOM has introduced programmes to support workforce transformation, including reskilling initiatives for sectors transitioning to green and digital economies.
