Singapore’s unemployment rate climbs as economic growth slows

Singapore’s unemployment rate increased last quarter as the economy slowed and the global recovery weakened.

 

The seasonally adjusted unemployment rate rose to 2.1% in the three months through June from 1.9% the previous quarter, the Ministry of Manpower said in a statement today. The median estimate of four economists surveyed by Bloomberg News was for a rate of 2.2%. The economy added 24,800 jobs last quarter, compared with an earlier estimate of 22,800, it said.

 

Singapore, ranked by the World Bank as the easiest place to do business, has cut taxes in recent years to encourage investment in the island nation, prompting companies to hire hundreds of thousands of foreigners. Last month, the government further tightened curbs on foreign labor after a backlash on the influx of workers from overseas led to record opposition gains in the May elections.

 

“The labor market remains tight,” Kun Lung Wu, a Singapore-based analyst at Credit Suisse group AG, said before the report. “Although we think a wage-price spiral is unlikely to happen when the global growth outlook is bleak, inflation and wage pressure could pick up quickly if and when growth prospects improve.”

 

The services industry added 20,200 jobs last quarter, while manufacturing companies increased payrolls by 800, the report showed. Construction employment rose by 3,600 in the three months through June, the government said.

 

 

PRODUCTIVITY SLIDE

Productivity slipped 2.5% last quarter, the ministry said. Average wages before adjusting for inflation rose 6% in the second quarter from a year earlier.

 

Singapore’s unemployment rate may be 2.2% by the end of this quarter and remain at that level at the end of the year, according to the median estimate in a survey of 20 economists by the Monetary Authority of Singapore released last week.

 

The government will raise salary thresholds and require better educational qualifications for some foreign workers, Prime Minister Lee Hsien Loong said last month. More than a third of Singapore’s 5.1 million population is made up of foreigners and permanent residents.(The Edge Singapore)