Last week, the Ministry of Manpower (MOM) released its Labour Market First Quarter Report that analyses the labour market in Singapore. This was a much-anticipated report for many people because it would provide insights into how the labour economics situation in Singapore has been evolving in 2021.
Overall the press release from MOM seemed to be positive, and our editor Dinesh at DollarsAndSense Business generally agreed with the sentiments in his recent article that summarised the key highlights in the labour report. One interesting statistic that stood out, for me at least, was the somewhat astonishing jump in the job vacancy to unemployed ratio (seasonally adjusted) figures. This went from 0.75 at the end of December 2020, to 0.96 at the end of March 2021.
What Is The Job Vacancy To Unemployed Person Ratio?
As explained by MOM, the Job Vacancy to Unemployed Ratio is the ratio of the total estimated number of job vacancies for the whole economy to the total number of unemployed persons.
Simply put, it’s an estimate of the total number of jobs available in Singapore for every unemployed person. Unemployed person in Singapore is defined as those who are aged 15 and above, who are not salaried or self-employed and are actively looking for a job, or available for work.
Generally speaking, the higher the job vacancy to unemployed ratio is, the better it is for job seekers. In Singapore, it’s common for the figure to be above 1. For example, as of December 2018, the job vacancy to unemployed ratio was 1.08. This means that for every unemployed person, there were 1.08 jobs available.
You may be wondering why the figure is more than 1. The reason is that the employment market is never fully efficient. For example, structural unemployment occurs when people are not equipped with the relevant skills that are required for the available jobs in the market. Alternatively, people who are seeking work may not be interested to take up the available jobs, due to a lack of interest in those industries that are hiring, or dissatisfaction with the remuneration.
From 0.75 To 0.96 In Three Months: What’s Happening?
In 2020, the job vacancy to unemployed ratio was as such.
|Job Vacancy to Unemployed Ratio|
The number above came as no surprise. Given that we were experiencing the worst recession in Singapore’s history due to the pandemic, it’s logical that there were fewer jobs available for every unemployed person.
However, the increase to 0.96 in 1Q2021 was a surprise. By looking at the ratio alone, we may quickly conclude that the job situation is improving for unemployed people. After all, there are now more jobs for every unemployed person. We may think that 1) the ratio is now higher because there are more jobs created and/or 2) there are fewer unemployed people among us in Singapore.
And while both reasons are likely true to some extent, it’s not a complete picture of what is happening.
In fact, when we compare the job vacancy to unemployed ratio, it’s remarkable to see that the ratio of 0.96 that we have had in 1Q2021, is higher than it was pre-pandemic in 2019.
In 2019, the job vacancy to unemployed ratio was 0.92 in 2Q2019, 0.87 in 3Q2019, and 0.82 in 4Q2019.
So, according to the statistics at least, it’s easier to find a job now than it was in 2019.
Job Vacancies In Singapore Is Currently At A Record High
If you think there is some mathematics trick at work, here’s another piece of statistics that may shock you. According to MOM latest statistics, job vacancies (seasonally adjusted) are currently at a record high of 68,400, exceeding the last high of 65,500 in March 2015.
In other words, there are more available jobs in Singapore right now than ever.
Similar to my reaction when I first saw these statistics, you must be thinking to yourself what is happening? How can there possibly be more jobs in Singapore right now than we ever had when we are still in the midst of a pandemic/recession?
Foreign Labour Has Come To A Standstill And Some Industries Cannot Find Workers
The short answer to this question is that the COVID-19 pandemic has cut our foreign labour supply. Due to border restrictions, it’s hard and expensive to bring in foreign workers. Those of you who tried hiring a foreign domestic worker over the past year may be able to testify to this.
In the labour report, it stated that job vacancies in Singapore are led by Manufacturing (mainly in Fabricated Metal Products, Machinery & Equipment and Electronics), Public Administration & Education, Construction, Information & Communications, and Financial Services. Some of these industries are heavily reliant on foreign workers, and are thus, facing a shortage of workers due to border closure.
Compared to pre-COVID, employment in the construction industry is down by about 42% while employment in the manufacturing industry is down by 43%.
To be clear, this isn’t a situation where there aren’t enough business contracts to go around. Let’s take the construction industry as an example, there are obviously plenty of existing construction projects that have yet to be completed, as well as new private housing and public projects to go around. Some of us are also feeling the frustration of the delayed completion of our BTO flats. Construction companies themselves are also in a rush to finish projects so that they can recognise their revenue.
Ongoing border restrictions will continue to restrict the inflow of migrant workers and weigh on the sector’s manpower needs, slowing down both employment and the completion of projects due to a lack of workers.
Work permit workers in Singapore from the construction, marine shipyard and process sectors have gone down by about 60,000 from December 2019 to December 2020.
So while it’s good to know that there is a record number of job vacancies in Singapore, especially if you are currently looking for a job, the pertinent questions are: which sectors are these jobs from and more importantly, who will be the ones filling them?
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