Will Singapore jobs face pressure as services growth slows?

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Singapore Jobs May Face Pressure Amidst Services Sector Slowdown

Jobs in Singapore could experience increased pressure as economic weakness begins to impact the services sector, a significant contributor to employment. The Ministry of Trade and Industry (MTI) has revised its 2019 growth forecast downwards to between 0 and 1 per cent, reflecting a broader economic deceleration. Singapore's economy registered a mere 0.1 per cent growth in the second quarter of the year when compared to the same period in 2018, indicating a significant slowdown.
Broadening Economic Weakness Affects Services Sector

Economists observe that the global economic slowdown is now affecting Singapore's services sector, which had previously been more resilient. Brian Tan, a regional economist at Barclays, noted that this sector, a major employer, is also experiencing a slowdown. This is a notable shift, as previously, weakness was largely confined to specific manufacturing areas. The Ministry of Manpower (MOM) anticipates that these conditions will likely lead to upward pressure on unemployment rates and an increase in retrenchments.
Services Sector's Crucial Role and Unexpected Slowdown

The services sector plays a pivotal role in Singapore's economy, accounting for approximately two-thirds of the Gross Domestic Product (GDP) and employment. Irvin Seah, a senior economist at DBS Bank, expressed surprise at the deceleration within the business services cluster, which is typically driven by domestic demand. The overall growth in the services sector was only 1.1 per cent year-on-year, a slight decrease from earlier estimates.
Labour Market Impact Expected to Lag

While current unemployment and retrenchment figures remain low, economists suggest that the full ramifications for the labour market will likely manifest later. The labour market is considered a lagging indicator, meaning its trends typically follow broader economic shifts. Brian Tan believes that the complete impact on jobs will become evident in 2020, as the current economic downturn continues to unfold.
Mixed Signals Within Services Sector

Despite the general trend of deceleration, some segments within the services sector continue to show strength. Barnabas Gan, an economist with United Overseas Bank, highlighted the finance and insurance cluster as a positive outlier, recording a robust 5.2 per cent year-on-year growth. This performance has helped to cushion the overall economic impact, with the services sector bearing the brunt of growth while manufacturing contracts.

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Will Singapore jobs face pressure as services growth slows?

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