As Singapore’s economy has gradually re-opened from the tail-end of 2021, the economy – and her companies and people – have benefitted. GDP growth for 1Q2022 is expected to register a healthy growth of 3.4%. While this is slower than the 6.1% GDP growth in 4Q2021, it is a positive signal of continued strength.
This has translated to a stronger jobs market in the first quarter of 2022. Below we look at four highlights from the First Quarter 2022 Labour Market Advance Release by the Minister of Manpower (MOM)
#1 Total Employment Continued To Grow By 41,100
Total employment growth continued to expand 41,100 in 1Q2022. Bouyed by the progressive lifting of border restrictions, this was underpinned by a strong increase in non-resident employment – rather than resident employment.
Statistics from the OCBC SME Index – which gives us a snapshot of how SMEs have performed in the quarter – also corroborate the positive economic results in 1Q2022 – with the index expanding for the fifth straight quarter at 50.5.
#2 Positive And Contractionary Sectors In 1Q2022
According to the MOM labour report, the Information & Communications (ICT) and Financial Services sectors continued to see steady growth in the first quarter of 2022.
The growth in the ICT sector was supported by IT and digital solutions – which Singapore has been championing even more loudly since the pandemic. The OCBC SME Index 1Q2022 also saw activity levels in the sector growing during the first quarter of 2022. It also provided a more detailed breakdown of the SME segments within the broad sector, with Data Processing and Software Development, and IT Consultancy, in particular putting up a strong performance on the back of Singapore digitalisation drive.
On the other hand, the ICT Manufacturing and Sales segment was impacted by challenges due to the Russia-Ukraine conflict and tight COVID-19 measures in China.
MOM’s First Quarter 2022 Labour Market Advance Release also saw a growth within the Financial Services sector, relating to a boost in security dealing and payment processing activities.
Going deeper into individual sector performance, the OCBC SME Index also found that more than half of the SME sectors posted a positive 1Q2022, with majority of the rest very close to the 50-mark as well and coming off “Green” 4Q21 stats.
The F&B sector was the only one that has depicted relatively weak activity levels in the past few quarters. Nevertheless, this should ease for the sector following the recent lifting of many domestic and border restrictions.
#3 Unemployment Rate Held Firm At Pre-COVID-19 Levels
Singapore’s Citizen unemployment in March rate remained at 3.2%, which is at our pre-COVID-19 levels. MOM expects unemployment rates to main at these levels as the labour market remains tight in Singapore’s recovering economy.
On the back of this, retrenchment rates have dropped to a record low of 1,300 employees in Singapore. The majority of this came from the Services and Manufacturing sector.
According to the OCBC SME Index 1Q2022, both sectors also registered a poorer performance this quarter, compared to 4Q2021, albeit still slightly expanding.
Expansion in the Business Services sector slowed down. The Business Consultancy and Advertising and Exhibition segments continuing to remain positive, but declined from the last quarter. These segments should continue to be supported by Singapore opening borders.
On the other hand, Accounting and Legal remained negative, but improve from the previous quarter.
While Manufacturing saw the second highest retrenchment rates. We should note that this is against already record low overall retrenchments. Moreover, the MOM labour report also highlighted an improvement in total employment within the sector – growing a relatively strong 7.2%. Statistics from the Ministry of Trade and Industry (MTI) also showed a 6.0% improvement in the sector’s GDP contribution. Hence, it is likely that the retrenchments within the sector is largely due to reorganisation/restructuring of certain firms. Given the relative strength of the sector, these individuals may have decent opportunities for re-employment as well.
The OCBC SME Index 1Q2022 also showed a marginal slowdown in the Manufacturing sector. Despite this, all segments within the sector remained positive. The primary constraints that the sector face is also supply disruptions because of the Russia-Ukraine conflict and China’s COVID-19 situation, as well as rising energy costs.
#4 67.6% Of Singapore Firms Plan To Add Headcount In 1Q2022
On the whole, the MOM labour report underscored strength in Singapore’s recovering economy, while the OCBC SME Index 1Q2022 depicted a relatively positive expansion in business activities.
As such, it is no surprise that firms will continue to vie for talent and pursue more growth in the upcoming months. 67.6% of companies have indicated plans to hire as at March 2022.
Another piece of positive news for both firms and employees is also the ability of firms to consider raising wages. As at March 2022, 31.2% of firms indicated an intention to increase salaries. This will come as a relieve for employees who are contending with rising inflation in their daily living expenses as well.
Read Also: Inflation In 2022: Feeling The Pinch From Paying More For Everyday Items
Economic Growth Should Continue Into 2Q2022
Given that many safe management measures have also been lifted since 26 April 2022, as Singapore lowered our DORSCON level from Orange to Yellow after more than two years, we can expect growth to persist in the upcoming months.
Nevertheless, MOM has highlighted certain threats to sustained economic growth, such as the Russia-Ukraine conflict, continued global supply disruptions, and surging inflation levels. These are concerns that SMEs need to heed as well.
Read Also: 7 Things Businesses Should Know As Singapore Steps Down To DORSCON Yellow On 26 April
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