Singapore’s labour market continued to grow in the first half of 2023, although there were signs of cooling labour demand, according to the latest labour market report by the Ministry of Manpower.

Total employment in Singapore continued to expand for the seventh consecutive quarter in Q2 2023 (24,300), but at a slower pace compared to Q1 2023 (33,000). The increases in Q2 2023 were from non-residents (25,500) as resident employment contracted (-1,200).

The increase in non-resident employment was mainly from construction. Resident employment growth contracted as robust increases in sectors such as community, social & personal services and financial & insurance services were offset by contractions in food & beverage services and retail trade due to outflow from the cessation of seasonal hiring.

Meanwhile, the unemployment rates remained low in June 2023 (overall: 1.9%, resident: 2.7%, citizen: 2.8%). The resident long-term unemployment rate also remained low at 0.5% in June 2023.

At the same time, after rising for three quarters, layoffs declined from 3,820 in Q1 2023 to 3,200 in Q2 2023. Overall, reorganisation or restructuring (69.9%) was the main reason for cutbacks.

Layoffs were driven by information & communications, mainly due to reorganisation or restructuring and concerns of high costs within the sector. Nonetheless, the likelihood of residents laid off from information & communications finding new jobs remained high (69.2%) compared to their counterparts from other industries.

The Ministry also found that labour demand continued to cool during the period.

The number of job vacancies declined for the fifth consecutive quarter to 87,900 in June 2023, from the peak of 126,000 in March 2022. Growth sectors including professional services, information & communications and financial services made up more than one-fifth of the overall available job vacancies in June 2023.

Following the easing in the number of job vacancies, the ratio of job vacancies to unemployed persons also dipped significantly for the second consecutive quarter to 1.94.

In August 2023, the Ministry of Trade and Industry narrowed the 2023 GDP growth forecast range to 0.5% to 1.5%, from 0.5% to 2.5%, as Singapore’s external demand outlook for the rest of the year remains weak. At the same time, downside risks in the global economy remain. These include more persistent-than-expected inflation in the advanced economies, which could induce tighter global financial conditions, as well as the risk of escalations in the war in Ukraine and geopolitical tensions among major global powers.

The growth prospects for the various sectors of the Singapore economy remain uneven for the rest of the year. In particular, the outlook for outward-oriented sectors like manufacturing and finance & insurance remains weak given the continued weakness in the external economic environment.

On the other hand, the outlook for aviation- and tourism-related sectors like air transport and accommodation, as well as consumer-facing sectors like retail trade and food & beverage services, remains positive due in large part to the ongoing recovery in international air travel and inbound tourism.

To remain competitive and resilient amidst economic uncertainty, the government encourages employers and workers to be proactive in making full use of government programmes to adapt to the changing environment. We encourage employers to press on with business transformation, to ensure that their businesses continue to be competitive, and their workers productive.