Singapore has witnessed a significant downturn in retrenchments for the second consecutive quarter. According to the latest preliminary labour market data released by the Manpower Ministry (MoM), the first quarter of 2024 has not only seen a reduction in job cuts but also an encouraging improvement in the hiring outlook. This development is a beacon of hope for many, signaling a robust rebound in the Singapore economy and a promising future for its workforce.
The MoM's report reveals that the total employment in Singapore grew by 4,900 in the January-March quarter of 2024, a slight decrease from the 7,500 growth observed in the previous quarter. However, this growth, primarily among Singaporeans and permanent residents (PRs), is a testament to the resilience and adaptability of the local workforce. Despite the contraction in non-resident employment, a first since the third quarter of 2021, the overall employment growth remains commendable, especially in the face of tightening foreign-worker quotas in sectors like construction.
The decline in retrenchments, from 3,460 in the fourth quarter of 2023 to 3,000 in the first quarter of 2024, is attributed mainly to ongoing business reorganisation and restructuring efforts. Companies across Singapore are pressing on with transformation initiatives, preparing themselves for the anticipated economic upswing. The MoM has expressed confidence that the Singapore economy is on the path to improvement in 2024, with labour demand expected to strengthen in alignment with economic growth.
Moreover, the MoM's forward-looking polls have painted an optimistic picture of the hiring landscape, with 50.7% of firms indicating an intention to hire in the next three months, an increase from 47.7% in the previous quarterly survey. This positive shift in hiring intentions underscores the growing confidence among businesses in Singapore's economic recovery and their readiness to capitalize on emerging opportunities.
However, the report also cautions about a potential slowdown in wage improvements, with the proportion of firms intending to raise wages dropping from 32.6% to 26.1%. This indicates a cautious approach by businesses amidst the economic rebound, balancing between growth and sustainability.
The construction sector, in particular, has felt the impact of the tightened foreign-worker quotas, with a notable decline in employment among work-permit holders. This marks the first employment decrease in the sector since the fourth quarter of 2021, highlighting the challenges and adjustments faced by industries heavily reliant on non-resident labour.
The latest labour market data from the Manpower Ministry offers a glimpse into the evolving landscape of Singapore's economy and workforce. The decrease in retrenchments, coupled with the positive hiring outlook and employment growth, signals a period of economic resilience and recovery. As businesses continue to navigate through transformation and restructuring efforts, the anticipation of a stronger labour demand and economic improvement in 2024 provides a solid foundation for optimism and growth in Singapore's labour market.
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