Current Singapore downturn unlike previous crises as job market still holding up, says minister

Singapore Manpower Minister Josephine Teo (pic) says the current slowdown is very different from previous economic crises as there is not much impact on the job market. — TODAY pic
Singapore Manpower Minister Josephine Teo (pic) says the current slowdown is very different from previous economic crises as there is not much impact on the job market. — TODAY pic

SINGAPORE, Nov 28 — The ongoing economic downturn is unlike previous crises that Singapore has gone through — the job market is not as badly affected and there are still good job opportunities in certain sectors, Manpower Minister Josephine Teo said.

Teo, who was speaking to the media yesterday ahead of the latest Manpower Ministry’s Labour Force in Singapore Advance Release, said the current economic slowdown can be described as “persistent showers but with pockets of sunshine.”

The labour force release, issued today, showed that despite economic headwinds, the resident employment rate was 80.8 per cent in June, higher than the 80.3 per cent a year ago, as more residents found jobs in professional services, financial and insurance services, information and communications and community, social and personal services.

Teo noted that despite economic growth of just slightly above 0 per cent and retrenchments on the rise, there are still companies hiring and jobs are still being added to the economy.

“This time round, I think it is harder to characterise what's going on, but I think we want to characterise it properly, so as not to cause our job seekers to lose hope,” she said.

Current slowdown unlike before

During the 2009 global financial crisis, Teo recounted, Singapore’s job market was hit much harder.

“At the time, a regular year’s retrenchment for Singapore was around 15,000, and analysts were projecting 2009 job losses to hit 100,000. So (it was a) really sudden downpour, a thunderstorm. You don't see that today. No analyst is coming up to make this kind of outlandish projection,” she said.

Similarly, the economic crisis caused by the 2003 Sars outbreak, the downturn after the 9/11 attacks and the bursting of the dotcom bubble in 2001 and the Asian Financial Crisis of 1998 were “very, very frightening years” for Singapore, she added.

“But actually if you compare today to those years, I think it's not the same,” she said. “There are difficulties but there are also opportunities at this time.”

When asked about the disconnect between government statistics showing employment growth and ground sentiment that jobs are not readily available, Teo said thgt the Government needs to find more ways to show job seekers where the available jobs are.

She added: “And I think we also keep in mind that at any one time our unemployment is maybe about 3 per cent. Now even with a resident workforce of 2.3 million, 3 per cent is still about 60,000 people. So, for 60,000 people to tell you that they haven't seen the jobs, it's not so surprising itself. But weigh that against the 97 per cent who are in jobs, you also can reflect their views.”

Uneven impact

The impact of the slowdown has been uneven, with sectors like manufacturing being hit harder than others, the labour force report showed.

Meanwhile, the community, social and personal services, professional services , information and communications, financial services and food and beverage sectors had the highest employment growth.

Overall, a total of 41,700 Singapore residents were hired in these five sectors between June 2018 and June 2019.

“Headline figures sometimes make people worried, and they give people the impression that the vacancies are not there, the job opportunities have closed up,” Teo said.

“But ... there are many companies that will tell you that they are still very short of people,” she added.

Even the manufacturing sector, which has been a major drag on Singapore’s economy, had 6,000 vacancies to fill in June this year, said Teo.

When asked how more people could be incentivised to join the manufacturing sector, given that job seekers tend to avoid joining it, Teo said job seekers should not be prejudiced by what they hear about the sector.

“(Instead), to realise that there are good companies with very good capabilities and making very serious efforts to strengthen themselves,” she added.

Government schemes such as the Professional Conversion Programme (PCP) and Place and Train Programme, which job seekers can make use of, are oriented towards companies that are already looking to hire.

“That will remain our focus: Help people enter into jobs where there is potential for growth, where there's potential for advancement,” she added.

In a separate announcement, Workforce Singapore said it will open up 1,000 places for professionals, managers, executives and technicians over the next three years to participate in two PCPs for the manufacturing sector.

Out of the total 13,000 who found jobs after going through a PCP over the last three years, about 10 per cent of them have joined the manufacturing sector, Teo said.

What economists say

Economists also agree that the present slowdown is not quite the same as previous economic downturns that Singapore has experienced.

Song Seng Wun, a CIMB economist, said that the key difference is that consumer and business confidence in previous downturns was extremely bad.

“Fear has a very strong emotional impact on our behaviour. During the Sars period, people were afraid to go out, full stop. All businesses were affected,” he noted.

Another difference between then and now is that there are new growth areas brought about by digitisation, such as e-commerce, he added.

While growth numbers are not great, OCBC Bank economist Selena Ling said that the mild uptick in the unemployment rate is not due to a spike in retrenchments but rather because of economic restructuring.

This could explain the disconnect job seekers feel on the ground and statistics showing positive employment growth, the economists said.

Jobs in the banking sector, for example, are becoming more software-driven, said Song. Instead of hiring staff for the traditional banking services, banks are now looking for people who are skilled in cybersecurity or compliance.

As employment growth is becoming more concentrated in sectors like infocommunications and technology and healthcare, a factory worker, for example, would not be able to make the switch straight away to these growth sectors.

“They probably have to undergo training, or take a pay cut or start from the bottom again,” said Ling. — TODAY

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