Employment growth slowed significantly in the fourth quarter of 2008, as the economic environment worsened. Preliminary estimates show that total employment grew by 26,900, which is only about half the gains of 55,700 in Q3 2008 and compared to 62,500 in Q4 2007. For the whole of 2008, total employment increased by 227,200, driven by strong gains earlier in the year. This is slightly lower than the increase of 234,900 in 2007.
The slowdown was felt across many industries, led by manufacturing where employment fell by 6,200 in the fourth quarter of 2008, its first contraction since the third quarter of 2003. For the whole of 2008, manufacturing employment grew by 20,300, which is less than half the increase of 49,300 in 2007. Services employment grew by 141,000 in 2008, slightly lower than 143,100 in 2007. Nevertheless, job gains slowed considerably in the fourth quarter (21,900) from a year ago (38,500), mainly weighed down by financial services, transport & storage and business services. With brisk building activities, construction workforce grew strongly by 64,100 in 2008, up from the gains of 40,400 in 2007; although growth also moderated in the fourth quarter with 10,800 workers added compared with quarterly gains of 14,500 to 22,400 in the preceding 3 quarters.
Both locals and foreigners benefited from the job creation in 2008. Local employment grew by 70,400 in 2008. Although lower than the record increases in 2007 (90,400) and 2006 (90,900), the growth is still higher than the gains in 2005 (63,500) and 2004 (49,900), since the last economic slowdown in 2003.
Due to the strong demand for workers earlier in the year, foreign employment rose by 156,900 in 2008, up from 144,500 in 2007. As the economic downturn deepened, the employment growth slowed significantly for both locals and foreigners in the last quarter of the year. As at December 2008, there were 1,057,700 foreigners forming 36% of the 2.96 million persons employed in Singapore. The majority comprising 64% or 1.90 million of the workforce were locals.
Preliminary estimates show that 7,000 workers were retrenched in the fourth quarter of 2008, up substantially from 2,346 in the previous quarter and 1,966 in the same quarter a year ago. The number of workers retrenched in manufacturing more than doubled from 1,709 in the previous quarter to 3,700. Driven by layoffs in financial services and wholesale trade, retrenchments in services increased by more than four fold to 3,200 from 562 in the earlier quarter.
For the whole of 2008, 13,400 workers were retrenched, substantially higher than 7,675 in 2007. Manufacturing formed the bulk of retrenchments (62% or 8,300), followed by services (37% or 4,900).
Besides retrenchment, some 1,500 workers were released prematurely from their contracts in the fourth quarter of 2008. Consequently, total redundancies (i.e. workers retrenched or released prematurely from their contracts) rose significantly to 8,500, more than double the 3,178 in the preceding quarter. For the whole of 2008, 16,000 workers were made redundant, significantly higher than the 8,592 in 2007.
With the economy weakening, the seasonally adjusted overall unemployment rate rose to 2.6% in December 2008 from 2.2% in September 2008 and the decade low of 1.7% a year ago. Among the resident labour force, the rate increased for the fourth consecutive quarter to 3.7% in December 2008 from 3.3% in September 2008 and 2.4% in December 2007. An estimated 69,700 residents were unemployed in December 2008. The seasonally adjusted figure was 73,100, up 12% from September 2008 and 58% from December 2007.
For the whole year of 2008, the unemployment rate averaged 2.3% (overall) and 3.2% (resident), up from 2.1% and 3.0% respectively in 2007. This is the first time that the annual average unemployment rate has increased since 2003, when it peaked at 4.0% (overall) and 5.2% (resident). On average, 62,900 residents were unemployed in 2008, compared with 56,700 in 2007.