Singapore’s labour market showed resilience in 2023 despite global headwinds and the inflationary environment with total employment increasing in the year, according to research from the Ministry of Manpower.

Total employment grew by 88,400 in 2023. Given the low resident unemployment rate, this increase was largely driven by non-residents (83,500), especially in the construction and manufacturing sectors. Resident employment growth (4,900) was mainly in financial services and professional services.

More recent employment data for the fourth quarter showed total employment expanded for the ninth consecutive quarter by 7,500. However, this increase moderated significantly in Q4 2023 for both residents (400) and non-residents (7,000) compared to Q3 2023 (resident: 2,800; non-resident: 20,800). The moderation was not unexpected as weaker hiring expectations and declining job vacancies from previous quarters indicated cooling labour demand, the Ministry noted.

Resident employment growth in Q4 2023 was in sectors which typically engage in year-end seasonal hiring such as retail trade (2,400), food & beverage services (500) and arts, entertainment & recreation (400), although these increases were much lower than previous years.

Meanwhile, December data from the Ministry showed that the unemployment rates remained stable and low (overall: 2.0%; resident: 2.8%; citizen: 2.9%). The seasonally adjusted resident long-term unemployment rate in December 2023 remained the same as September 2023 (0.7%).

In terms of job vacancies, after six consecutive quarters of decline from the peak of 124,400 in March 2022, the number of job vacancies rose slightly in December 2023 (79,800), from September 2023 (78,200).

The ratio of job vacancies to unemployed persons also rose to 1.74 in December 2023. The research noted that there have been more job vacancies per unemployed persons since March 2021 (0.96), indicating a moderately tight labour market.

Meanwhile, as firms restructured or reorganised their businesses, the number and incidence of layoffs rose in 2023 (14,590 or 6.7 per 1,000 employees) compared to the low in 2022 (6,440 or 3.1) but was similar to the pre-pandemic levels (average for 2015 to 2019: 14,180 or 6.7).

The top reason for layoffs remained business reorganisation/restructuring (58.6%) in 2023, due in part to the impact of global economic headwinds on outward oriented sectors such as wholesale trade, information & communications services and electronic manufacturing.

In Q4 2023, the number of layoffs fell to 3,460 (or 1.5 per 1,000 employees) from 4,110 (1.9) in Q3 2023. The decrease was driven by a fall in layoffs in wholesale trade, which saw a surge in Q3 2023.

While the re-entry rate (six months post-layoff) among laid off workers declined slightly in Q4 2023 to 61.5% from the previous quarter (65.3%), it remained within the range of 60.0% to 70.0% seen during the pre-pandemic years (annual average for 2015 to 2019: 65.7%).

Looking ahead, the Ministry’s survey indicates an improvement in business sentiments alongside Ministry of Trade and Industry’s forecast of improved economic growth prospects for 2024. More employers have plans to hire or increase wages in 2024. With global headwinds persisting, the Ministry also expects business restructuring and reorganisation to continue, which may contribute to further layoffs.