from the ground Up

By Goh Chin Lian and Jessica Cheam, The Straits Times, November 1 2008

THE impact of the global economic slowdown is showing in three key engines powering Singapore’s economy, according to preliminary figures released yesterday on the employment situation here.
Although the unemployment rate held steady at 2.2 per cent, the manufacturing, services and construction sectors added 20 per cent fewer jobs in the last quarter as the employment outlook darkened in response to the current financial crisis.
Echoing the view of other analysts who point to a time lag before the global downturn’s full impact hits home, Standard Chartered Bank economist Alvin Liew said of the Manpower Ministry’s report on employment in the third quarter:
“We have not seen the worst.”
The report showed that overall, 57,800 jobs were added here in the three months that ended on Sept30 this year.
This was down from 71,400 jobs added in the previous quarter, and slightly less than the 58,600 jobs added in the third quarter of last year.
The export-driven manufacturing sector felt the effects most. It added 4,900 jobs in the July-to-September period – half the number of the previous quarter.
Some 1,500 of the 2,000 workers laid off in the third quarter were also from manufacturing, mainly from electronics.
This is more than the 1,126 manufacturing workers shed in the second quarter.
National Trades Union Congress (NTUC) deputy secretary-general Halimah Yacob believes the full impact of the financial crisis has yet to be felt.
“Companies still have orders to fulfil, particularly for Christmas and the year end. Also, based on past economic downturns, there is always a one-
year time-lag between the start of a downturn and the full impact on job losses.”
Companies directly affected by a slowdown in the American market are reducing overtime, introducing shorter work weeks or planning longer plant shutdowns in the festive period rather than lay off workers, she noted.
Other sectors showed more moderate job growth in the number of jobs added.
Services held steady, adding 36,200 jobs in the third quarter. This was down from 38,300 jobs in the previous quarter.
Construction, a star performer on the back of the building boom, added 16,400 jobs. But this was off from its record high of 22,400 jobs in the preceding quarter.
Nanyang Technology University (NTU) economist Randolph Tan expects these sectors to reduce hirings as consumer sentiment in the US and Europe dips. And as September data showed, tourist arrivals fell for the fourth straight month.
He estimated the economy could, at most, add 10,000 jobs in the last quarter.
But contrary to analysts’ earlier pessimistic predictions, the jobless rate at the end of September was the same as at end June – 2.2 per cent.
Resident unemployment – which counts Singaporeans and permanent residents but excludes foreigners – rose to 3.3 per cent, up from 3.1 per cent in June.
The ministry said this is due to an increase in resident labour supply. Analysts said this could be because older Singaporeans and women heeded calls to join the workforce.
Official forecasts and analysts expect the ranks of the unemployed – which stood at 65,400 residents as of Sept 30 – to swell in the next few quarters.
All sectors are expected to see job losses and some foreign firms may move to cheaper locales abroad.
High-risk sectors include banking and finance, tourism, retail, manufacturing and transport, recruitment agencies said.
Some relatively stable sectors include law, accountancy, the public service, education, health care and energy.
NTU economist Tan Khee Giap believes it will take at least eight quarters or more for the jobless rate to recover to the norm, which is about 2 per cent.
On the ground, unions are asking companies to use the slack time to upgrade workers instead of laying them off. Grassroots groups are also helping job seekers through events such as employment fairs.
Analysts say the logical thing for workers to do is to remain in their current jobs rather than look for a “better” one.
Those who are retrenched should use the time to improve their skills by obtaining higher or professional qualifications.
NTUC director Ang Hin Kee said its database lists over 100 vacancies each in such sectors as childcare, tourism, marine and public bus transport. But many people lack the right skills to switch jobs.
Noting moves in recent years to set up training centres, certify workplace skills and redesign jobs, he said the systems in place meant that Singapore was in a stronger position to help the unemployed than when the 1998 recession hit.

3rd-quarter snapshots
57,800
jobs added (down from 71,400 in second quarter)
2,000
workers retrenched (up from 1,798)
Unemployment rate
2.2 per cent (unchanged)