Singapore jobless rate hits 2.9%, highest in more than a decade; retrenchments double

Office workers at Raffles Place after the circuit breaker period.

SINGAPORE: Singapore’s overall unemployment rate rose in the second quarter to its highest level in more than a decade, as retrenchments more than doubled and total employment declined amid the COVID-19 pandemic.

The overall unemployment rate rose to 2.9 per cent from 2.4 per cent in the preceding quarter, while total employment (excluding foreign domestic workers) plunged more than four-fold, preliminary data from the Ministry of Manpower (MOM) on Wednesday (Jul 29) showed.

“However, unemployment rates remained lower than previous recessionary peaks during the global financial crisis and SARS,” MOM added.

Overall unemployment rate hit 3.3 per cent in the third quarter of 2009, during the global financial crisis, and 4.8 per cent in the third quarter of 2003, amid the severe acute respiratory syndrome (SARS) outbreak.

Resident unemployment rate – Singaporeans and permanent residents – rose to 3.9 per cent in the second quarter from 3.3 per cent in the preceding quarter, while the unemployment rate of Singaporeans increased from 3.5 per cent to 4 per cent.

There were 90,500 unemployed residents in June 2020, of whom 79,600 were citizens, MOM said.

Singapore implemented a “circuit breaker” from Apr 7 to Jun 1 to curb the spread of COVID-19, and began a phased reopening of its economy on Jun 2. It entered Phase 2 of the reopening on Jun 19.


Retrenchments more than doubled in the second quarter to 6,700, from 3,220 in the previous quarter.

The number of retrenchments in the second quarter surpassed the 5,510 retrenchments in the second quarter of 2003 amid the SARS outbreak. It remained below the peak of 12,760, recorded the first quarter of 2009, during the global financial crisis.

All three broad sectors – manufacturing, services and construction – saw a rise in retrenchments over the quarter.

“Retrenchments rose significantly in wholesale trade and transport equipment, reflecting a reduced demand in retail and air travel respectively,” MOM said.


Total employment, excluding foreign domestic workers, fell by 121,800, more than four times the decline in the first quarter. This brought the total employment decline since the start of 2020 to 147,500.

The drop was felt across the three broad sectors of manufacturing, services and construction, MOM said.

Within the services sector, the contraction was sharpest in food and beverage services, retail trade, arts, entertainment and recreation, and education.

Construction also saw a steep decline in employment. Employment contraction in manufacturing was “more modest in comparison”, the ministry added.

Manpower Minister Josephine Teo said during a press briefing on Wednesday that the fall in employment was “broad-based” and expected, with the circuit breaker period in the second quarter of this year.

MOM warned that the external economic environment remains weak and some countries are experiencing a second wave of COVID-19 infections.

“Conditions for travel-related sectors remain very challenging. COVID-safe management measures will also moderate the pace of recovery in other sectors,” it said in a press release.

“Hence, softness in the labour market is likely to persist with continued weakness in hiring and pressure on companies to retrench.”

Singapore is in the midst of a technical recession, after its economy contracted by two consecutive quarters in the first half of this year.

Advanced estimates from the Ministry of Trade and Industry earlier this month showed that the country’s economy shrunk by 41.2 per cent in the second quarter, following a 3.3 per cent decline in the first quarter.

“Singapore is very plugged into the global economy. Where there is weakness in global demand, countries are likely to be much more cautious, and that is why we started very early on to plan for this situation,” said Mrs Teo.

Although some companies have resumed activities, they may ask existing employees to take on more responsibilities, Mrs Teo added.

There are still “pockets of hiring” among electronics and precision engineering firms in the manufacturing sector, as well as among companies needing to replace Malaysian workers affected by border control measures.

The Government is also trying to move forward hiring plans in the healthcare and early childhood education sectors, the Manpower Minister said.

“Since the start of the COVID-19 outbreak, we have been ramping up job support measures. These efforts are now coordinated through the National Jobs Council,” says MOM.

Besides the Job Support Scheme, more resources have been made available to implement career conversion programmes, the manpower ministry added.

“For jobseekers who are unable to secure a job due to the weak labour market, attachments and training opportunities will be provided for them to gain industry-relevant skills to help them do so once the market recovers.”

The response from companies to provide traineeship positions for new and recent graduates under the SGUnited Traineeships Programme has been “very strong”, it said.

These positions will be extended to mid-career individuals as attachments under the SGUnited Mid-Career Pathways Programme.

“From Aug 1, mid-career individuals can start applying for the 13,000 available attachments, with more opportunities coming online,” said MOM.


As for whether the authorities will extend foreign levy rebates and waivers, Mrs Teo said this was being looked at and the plans will be announced “in the not too distant future”.

The Government is aware that the construction, marine and process industries need support due to the safe management measures required at the worksites, she added.

For smaller construction firms, Mrs Teo said the ministry is working with the Building and Construction Authority to “hand hold these companies, clear all the processes progressively and try to minimise the number of bottlenecks that they will face”.

On Wednesday, Deputy Prime Minister Heng Swee Keat said the authorities are discussing further steps it needs to take to help the situation, and that details will be announced soon.

“In the immediate (term) we will have to look at how we can continue to protect the livelihoods of our workers, how do we create jobs and training opportunities – that is the top priority at this stage,” said Mr Heng, who is also Finance Minister.

“And then going beyond this, we have to look at how the Singapore economy emerges stronger post COVID-19.”

Mr Heng, who was visiting a public career coaching centre in Bedok, said jobseekers need to “change our mindsets” about suitable jobs, in the current job landscape.

“I’ve heard of many successful cases where people in various jobs, decide to try new things, decide to even take lower pay, because it’s a different situation and we need to rebuild our careers,” he added.

On the other hand, employers should take in people who are willing to pick up new skills and adapt, rather than just focus on hiring the perfect fit.

“Employers must redesign jobs so that we can make the best use of the skills of our people, make full use of all the tools that we’ve put out under our industry transformation maps … when the COVID-19 situation passes they will emerge stronger,” Mr Heng said.

Z24 News

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