Layoffs to ramp up in H2 amid market’s cautious business outlook

Retail, manufacturing sectors are paticularly vulnerable.

The Singapore labour market is poised to soften further in 2016, with layoffs expected to spike amid a more cautious business outlook.

OCBC reveals in a report that on top of firms’ heightened wariness, the ongoing economic-cum-business restructuring will play a huge part in the ramp-up of layoffs. OCBC notes this will ring particularly true for some sectors such as retail and manufacturing, given trend of business consolidation in these sectors.

Meanwhile, the overall unemployment rate was unchanged at 1.9% in the first quarter of 2015. However, the drop in both resident and citizen unemployment rate was largely due to a lower labour force participation rate among youths aged 15-24.

In addition, redundancies, which stood at 4,600 in the first quarter of 2016, is lower than the 5,370 posted in 4Q15. Nevertheless, it remains the highest since at least 1Q12.

On the flip side, unemployment is expected to remain low, averaging around 2.1% for the full year of 2016.

Wage growth, on the other hand, should moderate from 2015 but remained positive thanks to the negative headline inflation print. OCBC also notes that resident wage growth is tipped to come in at 2.5-3% this year, compared to 3.5% in 2015.