Chart of the Day: Here’s the sorry state of Singapore’s job market despite lower unemployment

Youths aren’t participating in the labour force, says MoM.

More residents of the city-state’s are finding themselves with a job, but Singapore’s job market remains soft as job creation slowed to 11.4K from a seasonally high 16.1K the previous quarter.

According to a report by Citi, the slowdown was led by services due to seasonal factors, while this was partly negated by rising job creation in construction.

“Manufacturing saw a sixth quarter of job losses at -2.0K (4Q: -6.7K), but at a slower pace compared to the last five quarters (avg: -4.7K). Redundancies fell to 4.6K (4Q: 5.37K), though still higher than the quarterly average of 3.9K for 2015. Redundancies rose in services (1Q: 2.5K, 4Q: 2.36K), but fell in manufacturing (1Q: 1.8K, 4Q: 2.48K) and construction (1Q: 0.3K, 4Q: 0.5K),” the report said.

Citi also said headline unemployment was lower than expected at 2.0%, while resident and citizen unemployment rates were 0.8% and 0.7%, higher than headline.

However, Citi said the Ministry of Manpower downplayed the fall in 1Q resident rate, attributing it to a temporal decline in the labour force participation rate for youths aged 15-24.

Meanwhile, Citi says the overall picture still holds strong in the cyclical softening of the job market, given the softening job creation and higher retrenchments.

“Slowdown in services job creation also corroborates the view that economic weakness has spread beyond the manufacturing sector. This echoes MAS’s expectations for the resident unemployment rate to creep up on the back of cyclical forces,” Citi said.