Singapore unemployment rate rises

By Amit Prakash Bloomberg News
Tuesday, February 1, 2005

More graduates in 4th quarter run into a slowing economy

Unemployment in Singapore rose in the fourth quarter of last year as graduates joined the work force and students sought vacation jobs, the government said Monday.

The nation's jobless rate rose to 3.7 percent in the final quarter from a revised 3.6 percent in the third quarter, the Ministry of Manpower said. The economy added 27,500 jobs in the three months that ended in December, the biggest gain in four years, with service industries accounting for more than four-fifths of the increase, it said.

Singapore's economy expanded at a 2.4 percent annual rate in the fourth quarter after shrinking an annual 3 percent in the third quarter. The government expects economic growth to slow to between 3 percent and 5 percent this year from an estimated 8.1 percent in 2004.

"With the economy expected to slow, we should see fewer jobs created this year and the unemployment rate is unlikely to fall significantly," said Nizam Idris, an economist at IDEAglobal. "The fourth quarter is typically when the number of entrants into the job market is the most."

The economy added 66,200 jobs in 2004, more than recovering the 35,900 jobs lost in the previous three years, the ministry said. The number of unemployed in the fourth quarter was 71,800 on a seasonally adjusted basis.

The jobless rate may fall to 3 percent by the end of 2005 because most industries are hiring, the Business Times reported Jan. 15, citing Lim Boon Heng, who heads the nation's biggest union. Sustained economic growth will lead to more jobs being created in the city sate, Manpower Minister Ng Eng Hen told Parliament in November.

Idris at IDEAglobal said the economy would need to grow more than 4.5 percent this year to bring the jobless rate down to 3 percent. He predicts economic growth of 4.2 percent in 2005 and expects the jobless rate to fall as low as 3.5 percent this year.

Fewer employers plan to hire additional workers in the first quarter of this year, said Gary Lazarroto, chief executive for Asia at Hudson, which provides recruitment services.

"In areas like the banking industry we've seen a slight easing but they are looking for employees this quarter in areas like risk management, particularly in sales, wealth management and consumer banking," Lazarroto said.

Services companies added 23,300 workers in the fourth quarter and manufacturing added 5,700, the report said. Construction jobs shrank by 1,000. A total of 2,900 jobs were cut in the fourth quarter, compared with 1,967 jobs in the previous three months.

More than 2.2 million people had jobs in December, a record, the report said. The government said it had revised the third-quarter jobless figure up from 3.4 percent because it modified the way it seasonally adjusts figures.