Chart of the Day: Hiring intentions head south as business outlook weakens

Wage growth is expected to ease.

Singapore’s jobs market is expected to soften further this year, according to Citi. The increased weakness in the hiring market is illustrated by a wider gap between the headline and resident unemployment rate, as well as the record-high number of retrenchments in the fourth quarter.

Citi warned that a number of government surveys point to a “marked slowdown” in hiring intentions at least into the first quarter of 2016, which means that further layoffs are likely, particularly in financial services.

“The assessment of the jobs market appears to have downshifted a notch in line with a weaker economy," Citi said.

The report noted that while the Manpower Report dated October 2015 noted that overall labour market tightness had “eased slightly”, and anticipated a continued
slowdown in employment growth, it nonetheless noted that overall wage pressures would be sustained and wage growth would pick up in 2015 and 2016 vs 2014.

This assessment was broadly re-affirmed in the December 2015 Recent Economic Developments (RED) report, although the expectation that overall wage growth would pick up was absent.

In contrast, the March 2016 RED takes this a step further, noting now that wage growth moderated in the fourth quarter, and while 2015 wage growth of 3.5% was close to its Oct expectations, policymakers now expect wage pressures to ease in line with the tepid economic environment.