Singapore Employers Fire Fewer Workers Amid Signs of Recovery

By Shamim Adam

July 31 (Bloomberg) -- Singapore employers fired fewer workers last quarter as the economy emerged from its deepest recession since independence in 1965.

Employers cut 5,500 jobs in the three months ended June, compared with 12,760 in the first quarter, the Ministry of Manpower said today. The Southeast Asian nation’s seasonally adjusted unemployment rate was 3.3 percent, unchanged from the previous quarter. That’s better than the 3.7 percent median forecast in a Bloomberg News survey of economists.

Prime Minister Lee Hsien Loong’s efforts to prevent job losses included handing out cash to companies to lower wage costs. The island’s economy expanded an annualized 20.4 percent last quarter from the previous three months, the first growth in a year, prompting the government to raise its 2009 forecast for gross domestic product.

“The pace of retrenchments will continue to ease in the second half but as more people enter the labor market and have difficulty getting jobs, the unemployment rate will keep on rising,” said Tetsuji Sano, a Singapore-based economist at Nomura Holdings Inc. “Consumer sentiment will remain weak.”

Employers retrenched 4,800 workers, and another 700 were released from their contracts early between April and June. The jobless rate is the highest in almost four years.

Total employment in the economy shrank 12,400 in the second quarter, double the losses in the first quarter, the ministry said. “In the difficult job market, more people are deferring job searches and pursuing courses,” it said.

Uncertain Outlook

Companies in Singapore continued to hire through the recession, Manpower Minister Gan Kim Yong said in parliament last week. It remains “uncertain” whether companies can sustain hiring, he added.

Singapore’s services industries have shrunk for three straight quarters, weakening an economy that is forecast to contract as much as 6 percent this year. Visitor arrivals to the island have slumped as the global slowdown curbs business and holiday travel.

“We’re not out of the woods and will continue to monitor the second half of the year,” Trade Minister Lim Hng Kiang said July 20.

To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net