Latest from MOM: How the job market is recovering in 1Q2022

ManagementMay 05, 2022 09:31

Source - Ministry of Manpower


Advance estimates showcase a generally positive hiring labour market in the first quarter of 2022. Total employment continued to increase, with non-resident employment forming the bulk of expansion due to more work permit holders in the Construction industry as border controls relaxed. Resident employment sees steady growth in outward-oriented sectors while the unemployment situation remained stray after lowering to pre-pandemic normal in Feb 2022.
Unemployment rates are expected to stay low in a tight labour market. Retrenchments sunk to a record low and were due to reorganisation or restructuring. Economic recovery is set in the upcoming quarter as demand for workers remains high and unemployment figures are expected to remain low.

Employment
Total employment increased by 41,100 at a slightly slower pace than in 4Q2021. The increase in non-resident employment was significantly higher than resident employment due to border restrictions lifting, especially in the Construction sector. Resident employment was mixed across sectors, although outward-oriented sectors such as financial services and Information and Communications continued their steady growth. There was strong demand for IT and digital solutions and high activities such as security dealing and payments processing. In sectors such as F&B, retail trade, and accommodation, resident employment declined after seasonal hiring for the festive season in 4Q2021. Given the significant relaxation of border measures from Apr 2022, continued non-resident employment growth is expected to rise.

Unemployment
Unemployment numbers were steady in March after returning to pre covid levels in Feb 2022. Resident and citizen unemployment rates remained unchanged at 3% and 3.2% respectively. The overall unemployment rate increased slightly to 2.2 percentage points but remained at the pre-covid rate. Unemployed residents fell to 73,900 in March 2022 from 4Q2022. Unemployment rates are expected to stay low due to a tight labour force although risks such as supply chain disruptions and higher prices could affect business sentiments and profitability which may in turn influence demand for workers.

Retrenchments
Retrenchments are expected to sink to a record low in 1Q2022 (0.6 retrenched per 1,000 workers). Reorganisation/restructuring remains a common reason for layoffs with manufacturing and construction sectors seeing a moderate rise in retrenchments.

Expected growth
Hiring expectations continue to be optimistic in the upcoming months. Firms with plans to hire increased in March (68%), along with the rise in job vacancies. 31% of firms also planned to increase wages within the upcoming 3 months. Although economic growth is positive, business sentiments could still be affected by inflationary pressures, and global supply chain disruptions, amid the Russian-Ukraine war.

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