Preliminary estimates released by Singapore’s Ministry of Manpower confirmed earlier warnings that the impact of COVID-19 on the labor market would be more extensive in 2Q 2020 compared to 1Q 2020.
Since the start of the COVID-19 outbreak, the Singapore government has been ramping up job support measures. These efforts are now coordinated through the National Jobs Council. Besides the Jobs Support Scheme, government hiring is being brought forward and more resources have been made available to implement career conversion programs.
For jobseekers who are unable to secure a job due to the weak labor market, attachments and training opportunities will be provided for them to gain industry-relevant skills to help them do so once the market recovers.
The external economic environment remains weak and some countries are experiencing a second wave of infections. Conditions for travel-related sectors remain very challenging. COVID-safe management measures will also moderate the pace of recovery in other sectors. Hence, softness in the labor market is likely to persist with continued weakness in hiring and pressure on companies to retrench.
The response from companies to provide traineeship positions for new and recent graduates under the SGUnited Traineeships Program has been very strong. In view of the strong support, these positions will be extended to mid-career individuals as attachments under the SGUnited Mid-Career Pathways Program.
Total employment (excluding foreign domestic workers or FDWs) contracted more sharply and retrenchments doubled. As expected, unemployment has risen but remains below the peaks seen in previous downturns.
In 2Q 2020, total employment (excl FDWs) contracted by 121,800, more than four-folds of that in 1Q 2020. This brought the total employment decline since the start of 2020 to 147,500.
All three broad sectors (Manufacturing, Services and Construction) saw sharper employment contraction. Within Services, the contraction was sharpest in food & beverage services, retail trade, arts, entertainment & recreation and education, Construction also saw a steep decline in employment. Employment contraction in Manufacturing was more modest in comparison.
Unemployment rates rose in June 2020 (overall: from 2.4% in March 2020 to 2.9% in June 2020; resident: from 3.3% to 3.9%; citizen: from 3.5% to 4.0%).
However, unemployment rates remained lower than previous recessionary peaks during the Global Financial Crisis and SARS. There were 90,500 unemployed residents in June 2020, of whom 79,600 were citizens.
Retrenchments were much higher in 2Q 2020 (6,700), compared to a quarter ago (3,220). While retrenchments have now surpassed the high during SARS (2Q 2003: 5,510), it remained below the peak observed in the Global Financial Crisis (1Q 2009: 12,760).
All three broad sectors saw a rise in retrenchments over the quarter. In particular, retrenchments rose significantly in wholesale trade and transport equipment, reflecting a reduced demand in retail and air travel respectively.
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