Singapore’s labour market maintained its recovery trajectory in 4Q 2021, as economic growth picked up momentum in the same quarter despite a global Omicron variant surge, according to the Labour Market Advance Release by the Ministry of Manpower in Singapore.

The unemployment situation continued to improve, and the Ministry expects unemployment rates to decline to pre-Covid-19 levels in the months ahead

In December 2021, a 0.1%-point decline was recorded for the overall unemployment rate (from 2.5% to 2.4%) when compared to November 2021. The citizen (Singapore citizens) unemployment rate also declined by 0.1% (from 3.5% to 3.4%) as compared to November 2021.The resident (including permanet Singapore residents and citizens) unemployment rate remained unchanged (3.2%). 

With gradual improvement in the unemployment situation throughout the year, the annual unemployment rates showed significant improvement in 2021 (overall unemployment: from 3.0% to 2.6%; resident: from 4.1% to 3.5%; citizen: from 4.2% to 3.7%).  However, they remain above pre-Covid-19 levels.

In Q4 2021 the resident employment rate continued to expand at a faster pace compared to the preceding quarter.  Non-resident employment  (foreign workers) saw growth for the first time in eight quarters. As a result, total employment (excluding Migrant Domestic Workers) grew by 47,400.

Part of the increase in resident employment reflects seasonal hiring due to the year-end peak period in Food & Beverages Services and Retail Trade.  Employment grew in these sectors for the first time after consecutive quarters of declines.  At the same time, resident employment continued to grow steadily in outward-oriented sectors such as Information & Communications and Financial Services. 

Meanwhile, non-resident employment saw an increase in the Construction sector in part due to the resumption of entry approvals for fully vaccinated CMP (Construction, Marine Shipyard and Process) workers to enter the country from early November.  The non-resident workforce in other sectors was relatively flat, after consecutive quarters of decline.

The Ministry noted that the non-resident employment expansion in the final quarter was however not sufficient to make up for the declines in the first three quarters.  As a result, for the full year 2021, non-resident employment is expected to contract, though at a much slower pace than in 2020.  This smaller decline, coupled with stronger resident employment growth, is expected to result in a rebound in total employment, compared with the contraction of 166,600 in 2020.

Layoffs are also expected to decline further in Q4 2021. The number of layoffs declined significantly over the year from 26,110 in 2020 to 7,820 in 2021. For both Q4 2021 and full year 2021, ‘reorganisation / restructuring’ was a common reason for the dismissals. This was different from 2020, when layoffs were mainly due to ‘recession / business downturn’ as cited by employers.

Over the year, layoffs had declined considerably across construction, manufacturing, and services. Layoffs declined most significantly in the services sector, which saw a sizable number of layoffs back in 2020, particularly in consumer-facing, aviation- and tourism-related industries such as retail trade, arts, entertainment & recreation, and air transport services.

“We expect the labour market to continue to improve in 2022, driven by an overall easing in domestic Covid-19 restrictions and the resumption of international travel,” the Ministry stated. “However, recovery to pre-Covid-19 state continues to be uneven across sectors, and uncertainty remains over the trajectory of the virus.  Adopting a risk-managed approach in border control measures has allowed our non-resident workforce to rebound to a small degree after two years of sharp decline.  We expect the non-resident workforce numbers to recover further in 2022.”