Singapore labour market shows signs of cooling as job vacancies decline

The latest data from the Ministry of Manpower (MOM) revealed a continued softening in the demand for labour in Singapore, with job vacancies dropping for the sixth consecutive quarter. While growth sectors like healthcare and financial services have contributed to increased employment, overall job opportunities have seen a decline.

As of September 2023, the number of job vacancies stands at 78,400, marking a decrease from the peak of 126,000 recorded in March 2022, according to finalised MOM data for the third quarter. The ratio of job vacancies to unemployed individuals decreased from 1.94 in June to 1.58 in September.

Professional, managerial, executive, and technical roles in the services industries accounted for almost half of the September job vacancies, totalling 38,700 positions. Growth sectors, including health and social services, information and communications, professional services, and financial and insurance services, constituted nearly one-third of the overall vacancies.

In contrast, the growth in total employment, excluding migrant domestic employees, slowed to 23,600 employees, marking the eighth consecutive quarter of growth but at a decelerated pace since Q3’2022. Specifically, employment numbers fell in food and beverage (F&B) services and retail trade, attributed to students leaving temporary jobs upon the end of vacations. However, MOM anticipates a resurgence in hiring temporary employees in the fourth quarter as F&B and retail outlets ramp up manpower for year-end festivals.

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The long-term unemployment rate for residents increased from 0.5% in June to 0.7% in September, aligning with pre-pandemic averages across most age groups. And retrenchments rose to 4,110, with wholesale trade contributing the majority. MOM attributed retrenchments to reorganisation or restructuring, with more organisations citing business and cost concerns compared to the previous quarter, reported The Straits Times.

Jester Koh, Associate Economist for UOB, suggested that the increased recruitment in health and social services may be structural, reflecting rising demand in an ageing population. He also noted that retrenchments in wholesale trade align with slowed activity in the sector but anticipates a potential recovery by mid-2024 with improving global economic conditions.