Singapore's jobs market at its weakest since 2009

Average unemployment rate sits at 3%.

The Singapore labour market might have slumped to its worst in the past year since 2009.

Citing the latest figures from the Ministry of Manpower (MOM), Citi Research said headline, resident, and citizen unemployment rates were unchanged from the preliminary estimates at 2.2%, 3.2%, and 3.5%, respectively. Citi attributed the rise to more entrants into the labour force.

Meanwhile, long-term unemployment rose 0.8% in 2016, compared to 0.6% in the previous year. This makes up 26% of unemployed.

"Amidst rising job market slack, clear signs of substitution between locals and foreigners – upward revision to 4Q net job creation was led by services and manufacturing," said Citi, noting that job creation for the whole year slowed sharply to 16,800, down from 32,000 in 2015 and 130,100 in 2014. This is the slowest job creation recorded since 2013.

However, compared to 2015 which saw just 700 local jobs created, local job creation jumped to 11,200 in 2016, though well below the 79,200 average in 2012-2014. Foreign job creation slowed to 5,700.

"This is a sign of tightening foreign worker inflows, amidst rising redundancies to the highest since 2Q09, with white collar PMETs accounting for 75% of resident redundancies. Indeed foreigner share of redundancies inched up to 42%, from the 2013 lows of 35%, whilst the rate of re-entry into employment for redundant residents inched up for the second quarter to 51.9%," noted Citi.

Meanwhile, vacancies fell for the ninth consecutive quarter to 0.77, the lowest since the third quarter of 2009.