EMPLOYMENT SITUATION (Update)

Mr Gan Kim Yong asked the Minister for Manpower if he will provide an update on the employment situation.

The Minister of State for Manpower (Dr Ng Eng Hen) (for the Minister for Manpower): Mr Speaker, Sir, in line with the improvement in the economy, retrenchment moderated in the first quarter of 2002. A total of 4,857 workers were laid off during this period. This level was close to half that in each of the preceding two quarters. However, job creation continues to be weak. Total employment has declined by about 14,000 in the first quarter this year for the third successive quarter, as the lagged effects of the economic downturn last year continued to affect demand for manpower. The losses were concentrated in the construction sector, about 10,000 jobs, due to persistent declines in both private and public building activities. Manufacturing employment fell by about 2,000, less sharply than in the preceding three quarters, owing to some recovery in manufacturing activities. Services producing industries also experienced cut-backs in employment, about 2,000 jobs, in the quarter.

Consequently, the seasonally adjusted overall unemployment has reached a high of 4.5% in March this year. The rate is expected to rise to about 5-5.5% in the later half of this year, as there is usually a lag between the economic recovery and employment growth.

If recovery continues, we can expect more creation of new jobs particularly in favour of those with higher skills and knowledge. However, many of the jobs lost in this downturn are unlikely to return as companies that have moved out or down-sized their operations in Singapore are unlikely to restart such activities here. This is especially so for the low-end manufacturing jobs. Hence, workers must acquire skills for new jobs in different industries and be prepared to move to where new jobs can be found and not wait for familiar ones to return. Only then can we expect unemployment to come down next year.