SINGAPORE, Feb 1 — The tentative economic recovery here has taken its first foothold in the job market. Three months after resident unemployment hit 5 per cent, the highest since 2003, December brought Christmas cheer as well as a sharp drop in the jobless rate.

The latest 3 per cent figure is also lower than the 3.6 per cent in December 2008. Overall unemployment now stands at 2.1 per cent, seasonally adjusted.

The fourth-quarter numbers cap a year in which employment for citizens and permanent residents grew by 43,000, according to findings on last year’s employment situation, released on Friday by the Manpower Ministry.



Foreign employment fell by 4,200, in sharp relief to the year before, when 70 per cent of the 221,600 jobs created went to foreign manpower. Of the 2.99 million persons employed in Singapore, 64.8 per cent were residents. In five years, that proportion should increase. That is the timeframe the Government will take to “tier down” the economy’s need for foreign workers, Minister Mentor Lee Kuan Yew said this week.
As the economy recovers this year, though, the question is whether employers will, once again, cast their nets overseas to fill positions? Or will resident employment outstrip foreign employment, like last year?
According to recruitment firm Ambition, 81 per cent of executives in Singapore who were surveyed in October were receptive to hiring overseas candidates, reflecting “that the lack of qualified candidates is already becoming a major issue in Singapore”.

With the Jobs Credit scheme having played a crucial role last year in skewing employment toward locals, the phasing out of the scheme this year could have some impact, said Forecast Singapore economist Vishnu Varathan. “In terms of hiring of locals and foreigners, it may not continue along the same trajectory,” he said.
However, the employment boom between 2006 to 2008 means there is already “significant accumulation” of foreign manpower in Singapore, said Dr Randolph Tan, head of business analytics at SIM University.
“They will still be part of a pool that employers can draw on, especially if there are some who stay more permanently,” he said. “The scale of foreign employment growth seems highly likely to be smaller than before the downturn.”

Still, there will be “resistance” from employers to scaling back reliance on foreign manpower and who may make the case that any such policy change should be deferred lest it compromises the “delicate economic health situation”, he added.

For the whole of last year, job gains from the second half of the year, spurred by hiring for year-end festivities and the integrated resorts, had offset the losses in the first half. Employment grew by 38,700 in the fourth quarter, compared to gains of 14,000 in the preceding quarter, according to preliminary estimates.

Meanwhile, some 22,700 workers were made redundant last year, up from 16,880 in 2008. Workers in manufacturing were the hardest hit, comprising 59 per cent of the redundancies, with services next (36.6 per cent) and then construction (4.4 per cent).

As for the overall unemployment rate, it averaged three per cent last year, up from 2.2 per cent in 2008. The resident unemployment rate was 4.3 per cent, with 87,000 unemployed, compared to 62,900 in 2008.
The year-end drop in joblessness, though, may not be sustainable, Mr Vishnu told MediaCorp.
When the hiring fever from the IRs and the financial services sector dies down in the first half of this year, “the rest of the year will depend on whether we see more firms expanding into Singapore and recruiting”, he said. — Today