Labour market sinks to 20-year low

Total employment contracted by 166,600 in 2020.

The labour market breached its 20-year low in 2020, according to the latest Labour Market report.

Excluding foreign domestic workers, total employment contracted by 166,600 for the full year of 2020, which the Ministry of Manpower (MOM) noted as the "sharpest decline in more than two decades."

The decline was borne by non-residents, who accounted for -181,500 of the employment decline. Non-residents made up 29.3% of total employment as of yearend, down 33.1% from the previous year.

As of December 2020, a total of 3,355,900 persons were employed, excluding FDWs, with 2,371,800 being Singaporean residents.

The public administration and education, health and social services, information and communications, financial and insurance services, and professional services sectors reported positive employment figures.

On the other hand, the decline in tourism and aviation due to the pandemic has negatively affected their respective labour sectors. Declines were also recorded in the manufacutiring and wholesale trade sector.

The unemployment rate also rose to 3% for the full year of 2020, 0.7 percentage points higher than the previous year's figures. The MOM noted that this did not exceed the unemployment rate registered in 2003 during the SARS pandemic, and during the Global Financial Crisis of 2009.

Retrenchments more than doubled in 2020 to 26,100 compared to the 10,690 registered in 2019 due to the impact of the pandemic on the economy. This was carried out by 1,962 companies, likewise higher than the 1,189 companies that downsized their workforce in 2019.

The services sector was the hardest hit when it came to retrenchment of workers, making up 19,760 or 76% of 2020s retrenchment figures. This was followed by wholesale trade (15%), arts, entertainment and recreation (8.5%), and the air transport (7.6%) sectors. There was fewer retrenchment in the petroleum, chemical and pharmaceutical products (0.6%) and real estate services (0.5%) industries.

Whilst more residents were retrenched than non-residents, at 14,380 and 11,730 respectively, non-residents are more prone to losing their jobs.

"Non-residents were more likely to be retrenched (15.7 retrenched per 1,000 non-resident employees) than residents (11.1 retrenched per 1,000 resident employees)," the MOM said.

When it came to retrenched residents, clerical, sales and service workers, females, those under the age of 30, and those over the age of 50 were the most vulnerable.

Average annual recruitment and resignation were at 1.6% and 1.5% respectively, another record low for the Singapore labour market.

Moving forward, the MOM expects labour market recovery to be uneven across sectors.

"Whilst Singapore’s COVID-19 situation remains under control and our vaccination programme is underway, uncertainties and risks in the global economy remain.Consequently, the labour market conditions remain uncertain although we have started 2021 on a firmer footing than in 2020.Labour market recovery may be gradual and uneven across sectors," the MOM said.