SINGAPORE — After five successive years of strong growth, employment numbers dipped in the first quarter this year, with the total number of people employed falling by 6,100 from the previous quarter. 

Sectors that took a hit included manufacturing, construction and parts of the services industry. On the whole, employment in the services industry — the main engine of job growth in past quarters — slowed the most dramatically: About 40,100 more were employed in the fourth quarter of last year. In contrast, 4,300 more were hired in the first three months of this year — and this failed to offset employment declines in the construction and manufacturing sectors.

As of March, total employment stood at 3,617,800 — a 2.7 per cent increase from a year ago, official figures released today (June 15) by the Ministry of Manpower (MOM) showed.

The number of people employed in retail trade as well as in accommodation and food services fell by 4,800 and 1,800, respectively. The MOM attributed the decline to the slowdown in tourist arrivals in the first quarter,  when visitorship fell 6.1 per cent from the year before. Real estate services also saw a dip of 1,900 in employment, while the construction sector saw employment fall by 3,600.

In manufacturing, employment, which was already negative in the previous quarter, continued to decline in the first quarter. It dropped by 6,900 amid weak output growth in marine and offshore engineering — figures fell 6.9 per cent on-year between January and March — and the completion of chemicals maintenance projects. 

The contraction in the employment market could be due to “seasonal declines and sharper moderation in employment growth in sectors with less favourable business conditions”, said the MOM. In the previous quarter, the total number of people employed spiked by 40,700. 

However, growth was seen in the community, social and personal services sector, where 6,500 more people were employed, as well as the administrative and support services sector, where 2,000 more people found jobs.

The MOM said certain segments of the economy could be transitioning to become less reliant on manpower. It added that further growth in the labour force is expected to be limited, given the recently achieved gains in labour force participation.

The ministry said the data was representative only of the first quarter, and the numbers would need to be monitored in order to gain a fuller picture. But several economists told TODAY that the dip was a sign of things to come. 

“We’ve seen the hiring trend easing, given that Singapore is on a slower growth trajectory. Global growth remains modest and there is pressure on some sectors — (with) tourist arrivals moderating (and) a more subdued property market,” said independent economist Song Seng Wun. 

Mr Song warned that the contraction could continue “until there are signs of a significant pick-up in external demand”. 

DBS economist Irvin Seah pointed to the impact of government policies. “The tightening measures introduced by the Government have restricted a company’s ability to hire more workers,” he said, adding that negative employment figures usually signal that the economy is entering a recession.

Nonetheless, the decline in employment without a corresponding change in unemployment and lay-offs suggests that the labour market remains tight, said Nanyang Technological University economics professor Walter Theseira. “Because of our ageing population, shrinking cohort sizes and high labour force participation rate, domestic labour force growth cannot be very strong,” he said.

However, UOB economist Francis Tan felt that the contraction could be “a one-quarter phenomenon”. “Job vacancies are still high and these positions will need to be filled up,” he said .   

Other trends highlighted in the labour report include a decline in seasonally-adjusted unemployment, from 1.9 per cent to 1.8 per cent over the quarter. Lay-offs rounded off to 3,500, fewer than the 3,910 redundancies recorded in the fourth quarter of last year. Close to three in four of workers retrenched in the January-to-March period were professionals, managers, executives and technicians (PMETs),  compared with one in two last year.

Mr Seah said this was a “big concern”. “Increasingly, more workers are going to be PMETs because of the improvement in education standards. This would make for a review of our labour and education policies,” he said. 

After climbing upwards in the past three quarters, the rate of re-entry into employment — six months after being retrenched — dipped two percentage points to 57 per cent in the first quarter. The MOM said this was not uncommon, and the figures could have indicated that workers who had been laid off might have taken a break during the festive season before returning to the workforce.  

The number of job vacancies continued to outstrip the number of jobseekers, with seasonally-adjusted vacancies holding steady at 65,300 — 200 fewer than in the previous quarter. Of these vacancies, 49 per cent were for PMETs. Seasonally adjusted, there were 143 job openings per 100 jobseekers in March, up from 142 in December last year.

CORRECTION: An earlier headline for this report misstated that employment shrank for the first time in five years. It actually shrank for the first time in six years. We apologise for the error.