Jobless rate plunges to a 5-year low of 1.8%

"Slightly rosier" than analyst's expectations.

According to CIMB, it’s tough to be an employer in Singapore. Despite subdued economic growth, the labour market remains tight with unemployment shrinking to a 5-year low of 1.8% SA at end-2012.

As the supply of foreign workers shrank, Singapore’s seasonally-adjusted unemployment rate dipped to 1.8%, the lowest for Dec since 2007, and slightly rosier than consensus and CIMB's estimates of 1.9% SA.

Within the resident labour force, unemployment eased to 2.6% SA (2.8% in Sep 12), with an estimated 55.9k residents unemployed as at Dec (Sep 12: 59.6k). The Ministry of Manpower also said unemployment for citizens dipped to 2.9% SA from Sep’s 3.0% SA.

Here's more from CIMB:

Some 33.4k non-construction jobs were added in 4Q12, the most since 1Q10’s +36.9k. Excluding foreign domestic help and construction labourers, 87.2k new jobs were created in 2012 vs. 2011’s 95.6k.

Following the tightening of foreign-worker inflows, new foreign employment (ex-construction & domestic) dropped to 32.2k in 2012 from 60.2k in 2011.

Employment gains in 2012 were 129.6k, the most in four years. Some 44.5k new jobs were added in 4Q12, the strongest in 17 quarters (55.7k in 3Q08) due to jumps in service (+32.1k, most in two years) and construction jobs (+11.1k, most in four years).

Services continued to generate most of the new jobs in 2012 (77.9k or 60.1%), though this was lower than 2011’s 96.1k (86.5% of all new jobs).

Manufacturing created more jobs last year, +11.1k (8.5% share) vs. 2011’s 3.5k, with the new jobs mainly in the chemical cluster, offseting job losses in tech manufacturing.

Boosted by public-building projects, employment gains in construction jumped to 39.1k last year from 2011’s 22k (2010: 3k).

Due to the government’s tightening of foreign manpower, there was a drop in new non-construction and foreign domestic jobs last year.

A total of 87.2k such jobs were created in 2012, down from 2011’s 95.6k. Foreigners accounted for 32.2k or 37% of these jobs vs. 60.2k or 63% in 2011.

Overall, the growth in foreign employment had eased to 70.4k in 2012 from 84.8k in 2011 while local employment rose 59.2k, up from 2011’s 37.9k.