Singapore’s jobless rate fell to a five-year low last quarter as companies hired more local workers after the government tightened the inflow of foreign labor.
The seasonally adjusted jobless rate fell to 1.8% from 1.9% in the third quarter, the Ministry of Manpower said in a statement today. The median estimate of nine economists surveyed by Bloomberg News was for a 1.9% rate. The economy added 44,500 jobs last quarter, compared with 26,200 in the previous period.
Prime Minister Lee Hsien Loong has raised foreign-worker levies and salary thresholds as part of measures to reduce the economy’s reliance on overseas labor after the island’s population jumped by more than 1.1 million since mid-2004. The clampdown has led to manpower shortages and rising job vacancies, damping economic growth as companies seeking to expand faced difficulty in hiring.
“Putting the rise in the job vacancy rate that we saw last year plus the foreign manpower tightening that is currently in place, it looks like we could expect the already tight employment conditions to get a little bit tighter,” said Selena Ling, a Singapore-based economist at Oversea-Chinese Banking Corp. “It’s probably going to hit the services side harder.”
Job vacancies rose 4.4% in September from a year earlier to 56,400, the Manpower Ministry said earlier this week. Most job openings were in services industries, it said.
Companies created 129,600 new positions last year, and the unemployment rate averaged 2%. Of the jobs added, more than 54%, or 70,400, went to foreign workers. That is lower than the 84,800 positions in 2011.