Singapore Employment Plunges Most Since SARS Outbreak in 2003

(Bloomberg) -- Employment in Singapore began the year with its sharpest quarterly contraction since the SARS outbreak in 2003 as the city-state contends with the highest number of coronavirus infections in Southeast Asia.

Total employment, excluding foreign domestic workers, slumped by 19,900 in the first quarter due to a “significant reduction” in the number of foreigners working in Singapore, the Ministry of Manpower said in a statement Wednesday.

The unemployment rate climbed to 2.4% in the first three months of the year, its highest level since the third quarter of 2009, according to the statement. Still, the rise was lower than the median estimate of a 2.6% increase in a Bloomberg survey of economists.

For now, at least, unemployment rates “remain lower than the highs seen during SARS and the Global Financial Crisis,” the ministry said in the statement. “Budget relief measures to support workers and businesses may have helped to cushion the overall impact, especially on local jobs.”

The data come as the government has committed more than S$60 billion ($42 billion) in fiscal support for the economy and the Monetary Authority of Singapore has undertaken unprecedented easing steps to cushion the pandemic’s impact on businesses and households. “Circuit-breaker” steps to limit movement to prevent the virus from spreading have been extended to June 1 amid a sharp spike in recent cases.

Services Hit

Gross domestic product currently is forecast to contract as much as 4% this year, but the slump could turn out be even more severe than that, Trade and Industry Minister Chan Chun Sing said last week. Wages will take a bigger hit than jobs as businesses cut costs, the Monetary Authority of Singapore said Tuesday.

The unemployment rate for Singapore residents rose to 3.3%, from 3.2% in the final quarter of 2019, while unemployment among citizens rose to 3.5% from 3.3%.

Services saw an increase in retrenchments, mainly in retail, food and beverage and accommodation. Even those still working may have felt the impact of the virus.

“Workers who remain in employment may have experienced reductions in working hours or adjustments in their salaries,” the ministry said. “Labor market conditions are likely to worsen in the upcoming quarter, given the sharp fall in demand globally as well as in Singapore as firms adjust to circuit-breaker measures.”

Overall retrenchments rose to 3,000 in the first quarter, from 2,670 in the quarter through December. Still, they remain significantly lower than the quarterly peak of 12,760 reached during the global financial crisis, according to the ministry.

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