Advance labour report shows 100% of job growth in Q2 2024 went to foreign workers

The latest advance labour report from Singapore’s Ministry of Manpower (MOM) reveals significant shifts in employment dynamics for the second quarter of 2024, with 100% of job growth going to foreign workers.

The report shows that the overall labour market expanded, with employment growth observed, stable retrenchment numbers, and declining unemployment rates.

However, despite the positive image of a healthy job market, Singaporeans may be alarmed to know that all job growth during this period was attributed to non-resident workers, while resident employment experienced a slight decline — though MOM did not provide the exact figures for the decline.

Employment Growth Dynamics

Total employment in Singapore increased by 11,300 in Q2 2024, a substantial rise compared to the 4,700 growth in Q1 2024. The report indicates that non-resident employment was solely responsible for this increase. In contrast, resident employment saw a minor decline, which MOM attributed primarily to seasonal factors in the Retail Trade sector, where temporary hiring typically spikes in the fourth quarter to cater to year-end festivities.

Non-resident employment growth was driven predominantly by lower-skilled Work Permit holders in non-PMET roles within the Construction and Manufacturing sectors. These sectors traditionally employ non-residents due to the nature of the work, which is less attractive to resident workers. The rebound in non-resident employment reflects continued demand for labour in these areas and firms’ adaptations to changes in the Dependency Ratio Ceiling.

Sector-Specific Trends

Despite the overall decline, resident employment continued to rise in growth sectors such as Financial Services, Information & Communications, Health & Social Services, and Professional Services. The slight overall decline in resident employment was expected, given the typical seasonal contraction in Retail Trade during this period. However, it should be noted that resident employment covers both Singaporeans and Permanent Residents.

Unemployment and Retrenchments

The unemployment situation showed improvement, with rates declining in June 2024 compared to May 2024. Overall unemployment dropped from 2.1% to 2.0%, resident unemployment from 2.9% to 2.7%, and citizen unemployment from 3.0% to 2.8%. These rates remained within the range of non-recessionary periods.

Retrenchments held steady at 3,100 in Q2 2024, compared to 3,030 in Q1 2024. Business reorganisation and restructuring continued to be the leading causes of retrenchments, which remained broadly stable across most sectors.

Future Outlook

Forward-looking polls on hiring and wage expectations indicate stability for the upcoming quarter. MOM expects labour market momentum to be sustained, with both wages and employment projected to grow in tandem with a gradual economic pick-up in Singapore.

However, given the slowing growth of the resident workforce and already low resident unemployment rates, further growth in resident employment is expected to be more muted.

The full Labour Market Report for Q2 2024, scheduled for release in mid-September 2024, will provide detailed insights, including a breakdown of resident and non-resident employment, sectoral analysis, job vacancies, labour turnover, and re-entry rates among retrenched residents.