Singapore's total employment slumps by 6,800 in Q1

This the biggest drop since 2Q09.

The Singapore labour market has seen employment contract by 6,800 in the past quarter.

Citing figures from the Ministry of Manpower, Citi Research said this is the largest quarterly contraction since 2Q09, when employment declined by 7,700.

More so, redundancies were revised downwards, especially in services, and white collar PMETs accounted for 71.4% of redundancies.

However, the job vacancies to seekers ratio rose for the first time in ten quarters.

"Importantly, the ratio of job vacancies to unemployed persons – an important barometer of labour market demand-supply balance monitored by the authorities – rose to 0.81 (4Q16: 0.81), the first rise since the ratio peaked at 1.42 in 2Q14, with the seasonally job vacancy rate stable at 2.3%," Citi Research said. This came as headline unemployment rate for the said quarter clocked in at 2.2%.

Citi Research said in a broader context, the overall picture remains that of significant labour market slack.

For instance, the number of on short work week or temporary layoffs rose to the highest since 2Q13. Also, recruitment and resignation rates continued to fall to levels not seen since 1Q09. It also noted that wage growth slowed to 1.9% YoY in 1Q17 (4Q16: 3.3%), the slowest since 4Q14 (0.8%), and as a result, overall unit labour costs fell 1% YoY – weakest since mid-2010.

“On the whole, despite some bright spots, the picture as of 1Q remains consistent with MAS’s Apr-17 expectations for continued labour market softness. Still, given the lagged nature of job market data, we would look out for monthly data on domestic demand, and core inflation. 2Q prelim job market data and inflation expectations should also be watched. Any increases could challenge MAS’s view of muted demand inflation pressures and make Oct a closer call than priced in by markets,” Citi Research said.