It’s a sobering picture on the labour market in Singapore

Singapore's employment growth has moderated sharply, although unemployment rate remains low at 1.9% sa. Only 31,800 jobs were added over the entire year. This is way lower than in previous years. In fact, the growth in 2015 was the lowest since 2003. The overarching reason for the poor showing is the dire economic conditions in 2015. Slowdown in the economy and a tighter supply of foreign manpower have curbed the growth in employment. 

Manufacturing sector, which is already in recession, saw employment fell by 22,400 in the entire year, down from a decline of 4,400 jobs in 2014. While manufacturing may appear to be the main drag, the sharpest drop came from the services sector. The services employment growth moderated to 45,000 in 2015, down from 119,700 in the previous year. 

Of the 31,800 jobs that were added, 99% (31,600) were foreign employment. Locals being mainly engaged in higher skilled jobs (i.e. PMETs) tend to be more susceptible to the external business cycles. Demand for blue collared jobs (e.g. nurses, construction workers) is usually more inelastic and domestically driven. So, when growth momentum slows, the locals will feel the pinch more than the lower skilled foreign workers. 

Next 6-9 months will be exceptionally challenging. The growth momentum is likely to slow further, which will have repercussion on the labour market. Much will depends on the economic outlook in China. Given the deceleration in China and the lack of growth impetus from the US or the Eurozone, there could potentially be more downside risks on the domestic employment outlook. The winter is turning colder and it's time to tighten the belt.