Q1 jobs growth rose by 36,500, below Q409 high of 37,500
By TEH SHI NING
(SINGAPORE) Singapore's economic recovery continued to drive jobs growth in Q1, pushing the unemployment rate down to pre-crisis levels.

The overall unemployment rate, adjusted for seasonal factors, was 2.2 per cent in March, down from 2.3 per cent last December, said the Ministry of Manpower (MOM) yesterday. This means that the unemployment rate has fallen to what it was back in September 2008, when the financial crisis first broke out.

Jobs growth continued for a third quarter too, albeit at a slightly slower pace, driven mostly by fresh jobs in the services sector. Total employment rose by 36,500 jobs in the first quarter, just below the seasonal high of 37,500 registered in Q4 2009, MOM's quarterly labour market report said.

This was marginally higher than preliminary estimates, but Citi economist Kit Wei Zheng noted that job creation still falls short of a 40,000 estimate from global employment firm Manpower Inc's survey. This could indicate that labour demand still exceeds labour supply, he said.

The bulk of job gains, 33,400 jobs, were from service sectors, with community, social & personal services, financial services and real estate & leasing services hiring most aggressively. Mr Kit thinks hotels and restaurants' slight loss of 100 jobs could partly reflect tighter enforcement of employment quotas for foreigners.

Meanwhile, manufacturing added 3,100 workers in Q1, its second quarter of jobs growth after trimming staff all through the downturn. But the construction sector posted its first loss of 400 jobs after 20 consecutive quarters of growth.

Mirroring several recent surveys conducted by human resource firms, MOM's report showed a pick up in job-hopping too. Higher labour turnover - signalling a tighter labour market - was seen in increases in the average monthly recruitment and resignation rates to 2.6 and 2 per cent respectively in Q1. Adecco Southeast Asia's regional manager Lynne Ng said: 'We are seeing a far more fluid job market, with candidates being more optimistic about job opportunities.'

There is reason to be too, as job vacancies rose 4.3 per cent over the three months to 37,300 in March 2010, 63 per cent above the number of job vacancies a year ago.

'People are moving for better remuneration and career prospects, and there is a distinct increase in candidate expectations with regards to salary and benefits,' said Karin Clarke, regional director of Randstad Singapore and Malaysia. And, 'organisations may also start to have flexible budgets for headhunting talent', said Kelly Services Singapore managing director Mark Sparrow. Both Randstad and Kelly are expecting the banking & finance and healthcare industries to stage more aggressive hiring in coming quarters.

Strong labour demand in coming quarters could also push headcount costs upwards. Mr Kit thinks unit labour costs - which fell 8.7 per cent in Q1 thanks to a 13 per cent hike in labour productivity - could begin rising in the second half of this year, and add to inflation pressures or squeeze the margins of more labour-intensive sectors.

Nominal wage growth also surfaced in Q1, with average monthly earnings rising 3.7 per cent year-on-year, following four consecutive quarters of decline.

Mr Kit said that there may be more pressure for nominal wages to rise going forward. Although real earnings, adjusted for inflation, rose 2.8 per cent in Q1, they remain below their March 2008 peak.