Serious Recession 2020 Starts Now!

[Pinkieslut]

TODAYonline | The Big Read in short: Economic uncertainty hurts fresh grads’ job prospects
Each week, TODAY’s long-running Big Read series delves into the trends and issues that matter. This week, we take a look at the impact of the uncertain economic outlook — stemming from the United States-China trade war — on the job market for fresh graduates. This is a shortened version of the feature, which can be found here.
SINGAPORE — When Miss Halida Thanveer Asana Marican did not hear back from employers after starting her job hunt in December, the Life Sciences graduate from the National University of Singapore (NUS) panicked and ramped up her search. The 24-year-old sent out about 30 applications in all before securing a 21-month contract role as a research assistant in April.
Fellow Life Sciences graduate Sankar Ananthanarayanan had better luck with his job hunt. The 24-year-old landed a job as a university administrator on his first try in March, after hearing about the opening from a friend three months earlier. However, he too will be on a year-long contract rather than a permanent appointment.
Short-term contracts, along with multiple rejections or even non-replies to job applications, as well as having to lower their job and salary expectations — these are what some fresh graduates are experiencing, as their job hunt this year coincides with the US-China trade war, which has cast a pall on the global economy and threatens to dampen Singapore’s economic growth in the months ahead.
TAKING UP CONTRACT JOBS
The increased prevalence of contract jobs, due to a variety of factors including the rise of the gig economy, is well-documented.
Mr Alvin Ang, founder and director of talent acquisition at Quantum Leap Career Consultancy, said that contract roles allow employers to react quickly to changing business conditions by letting go of some staff during a sudden economic downturn.
Still, some fresh graduates told TODAY that they are open to taking up contract jobs as other factors such as job scope or work environment are more important.

Short-term contracts, along with multiple rejections or even non-replies to job applications, as well as having to lower their job and salary expectations — these are what some fresh graduates are experiencing, as their job hunt this year coincides with the US-China trade war Photo: TODAY
Miss Aisha, 21, who will be graduating in August from the Singapore University of Technology and Design, said her priority was to secure a job related to her field of study in information systems. She added that she welcomed a contract position as it would add to her job experience.
For Miss Halida, the contract position which she snagged gives her the flexibility to decide on future options, such as pursuing further studies.
Likewise, NUS chemical engineering graduate Meera Sundar, 22, felt it was not “a big deal” for her whether an available position is permanent or on contract basis.
“The only major difference is that if my contract runs out, I will probably have to find another job in two years or so. But I know if I do well in the company, I can still get converted to a permanent position,” said Miss Meera. She sent out 40 job applications over six months and eventually landed a suitable full-time job.
Ms Linda Teo, the country manager of recruitment company ManpowerGroup Singapore, said there appears to be a shift in mindset towards contract work among job seekers, including fresh graduates.
“Fresh graduates like working in contract jobs as they can experience different job roles and environments while building up their skills. For existing workers, working in contract jobs enable them to better manage their time,” she said.
Mr Ken Ong, a manager at recruitment firm Michael Page, pointed out that there has also been a corresponding shift in how firms perceive contract positions: When these roles started emerging three years ago, those who held contract positions were mainly hired to clear the backlog of work or cover certain roles temporarily.
Those hired on contract did not have a sense of purpose in their work or belonging for the company. However, this has changed with companies extending equivalent benefits to both contract and permanent staff, said Mr Ong.
OVERALL JOB MARKET OUTLOOK
As fresh graduates continue to look for jobs, their hunt is unlikely to be aided by the trade tensions between US and China.
Singapore Business Federation (SBF) chairman Teo Siong Seng said that apart from US-China trade tensions, the Brexit saga will also affect business, and consequently hiring sentiments.
“If trade tensions continue for a long time, it may affect global economic growth. Business sentiments will be more careful and hiring will slow,” he said.
Job prospects for fresh graduates, in particular, will be “tougher”. He added: “I think businesses will only hire if they need to replace (staff), but not for expansion. You can also expect to see more contract jobs being offered to new hires.”
Mr Kurt Wee, head of the Association of Small and Medium Enterprises (ASME), said that there are signs of overall global trade shrinking, which do not bode well for Singapore’s economy.
However, the impact of the trade war on the job market will only be evident one or two quarters down the road, he said.
He added that while companies that are growing are still keen to hire and groom young talent, the increasingly cautious outlook could dampen the rise of starting salaries rather than the number of jobs available.
Mr Wee said that companies which are currently looking for regional opportunities— to hedge against any downsides in the trade war over the next two to three quarters — could also defer hiring until their operational structures are more defined for the longer term.
The manufacturing and logistics sectors are likely to be more cautious than others in hiring, given that these sectors are likely to be most affected by the trade war, he said.
ADVICE FOR FRESH GRADS
Given that the region might benefit to some extent from the US-China trade war, SBF’s Mr Teo urged fresh graduates to consider working overseas — not just in “nice countries” but also the “tough ones” among the members of the Association of South-east Asian Nations (Asean).
“Asean is a bright spot in the world economy. It offers a lot of good prospects and I encourage young people to take it on, even if it is just an internship stint,” he said.
Michael Page’s Mr Ong called on fresh graduates to value exposure over stability, although their decision on whether to work out of Singapore should depend on the industry.
Those who wish to be in the manufacturing industry can remain in Singapore, which is the hub for high-end manufacturing, while those keen on banking and finance could also consider Hong Kong, he said.
Exploring different markets to gain experience and skills could be even more important these days, given the rising prevalence of contract jobs.
Ms Teo from ManpowerGroup noted that in such an environment, fresh graduates should aim to build up their repertoire of hard and soft skills which would allow them to adapt to shorter skill cycles and changing work demands.
For those who are concerned that they may be seen as “job-hoppers” by taking on contract roles, Ms Teo said that employers are aware of the growing trend and are open to candidates who have taken on multiple contract roles.
Whether a person is in a contract or permanent role, companies will strive to retain the individual so long as he or she performs well, said Mr Ong.
“If you are deemed valuable in the company, hiring managers from different departments will try to place you because no company will simply want to lose a good employee,” he added.

 

[Pinkieslut]

More workers retrenched in first quarter 2019 than a year ago, job vacancies decline
SINGAPORE — More workers were retrenched in the first quarter of this year compared to the previous quarter and a year ago, the Ministry of Manpower (MOM) said in a report released on Thursday (June 13).
The increase was driven by manufacturing and affected workers in production and electronics, the ministry’s latest labour report said.
And after seven consecutive quarters — or close to two years — of increases, the number of job vacancies declined in the first quarter of this year, from 62,300 last December to 57,100 in March this year.
Here are the key findings from the report:
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RETRENCHMENTS ROSE

• As of the first quarter of this year, 3,230 workers were retrenched. This was higher than the quarter before (2,510 workers) and a year ago (2,320).
• Top reason for retrenchments: Business restructuring and reorganisation. But the report also said that high costs and a downturn in the market have led to the higher layoffs.
• Electronics formed 18 per cent of the retrenchments, followed by the services industries such as wholesale trade at 16 per cent, and the transportation and storage sectors at 10 per cent.
• Among those retrenched, professionals, managers, executives and technicians (PMETs) continued to form the majority at 69 per cent. They are “more prone” to layoffs since they make up a larger share of the workforce.

What this means: Economists pointed out that the escalating trade war between the United States and China has hit the manufacturing sector head on. It does not help that Singapore’s electronics cluster has been on a downcycle in the past year and is already in the “contraction” territory.
So, to reduce costs, companies have to trim headcount, they added.
Senior economist Irvin Seah with DBS bank also noted that the push to get manufacturing companies to leverage technology to automate processes has indirectly resulted in layoffs simply because they do not need manpower.
Maybank Kim Eng's economist Chua Hak Bin said that the trade war has hit the electronics supply chains, especially those that rely heavily on China's market. And this disruption will likely worsen in the coming months as the US’ export controls for suppliers to China’s technology companies will add another layer of disruption.
JOB VACANCIES DECLINED

• Demand for labour has risen from 46,900 in March 2017 to 62,300 last December. But the trend came to a halt as it dipped in the first quarter of this year.
• Still, there continued to be more vacancies than job seekers, although the seasonally adjusted ratio of job vacancies to unemployed persons dipped slightly from 1.10 last December to 1.08 in March this year, the report said.
• Job vacancies for PMETs formed the bulk of the increase, with this coming from sectors such as financial, professional as well as community and social services.
• As of March this year, about three in five or 57 per cent of job openings were PMET positions. The remaining vacancies were for clerical, sales and service workers as well as production and related workers.

What this means: Mr Seah from DBS said that the rise in retrenchment, coupled with the easing demand for labour signals one thing — the start of a downcycle in the labour market, which he expects to worsen in the coming months unless there is respite in the economy.
When the labour market is in a downcycle, PMETs will be the hardest hit as they form the bulk of the labour sector, he added. Lower-skilled workers will be spared in such a scenario since the Government has tightened the inflow of migrant workers over the years.
“There are safeguards for lower-skilled workers, but not so much for PMETs,” Mr Seah said.
Saying that there is a likelihood of slow employment growth, Mr Chua pointed out that stricter dependency ratio ceilings for the services sector from 2020 could dampen labour demand in areas such as retail trade, hospitality as well as food and beverage.
Mr Song Seng Wun, an economist with CIMB Private Banking, said that though the latest survey by the Monetary Authority of Singapore (MAS) shows economists downgrading Singapore’s 2019 growth forecast — it is to increase by 2.1 per cent this year, a slower pace than the 2.5 per cent growth forecast in the March survey — it still indicates a possible soft growth in the second half of this year.
But if the trade war worsens, the possibility of a soft growth might “fail to materialise”. “Then the labour market will soften further. Demand for labour will continue to ease,” he added.
TOTAL EMPLOYMENT GROWING

• Driven primarily by the services sector, total employment continued to grow by 10,700 in the first quarter of this year, with the figure higher than the same quarter last year. This figure excludes foreign domestic workers.
• For the first time in three years, employment in construction rose slightly by 200, with MOM attributing it to the increase in public- and private-sector construction activities.
• In contrast, the job market in manufacturing continued to take a beating as employment declined for the second consecutive quarter led by cutbacks in electronics.
• And gloomier news for the electronics cluster — it posted its largest employment contraction in six years, amid a rise in retrenchments in the first quarter this year, from 80 to 600. The outlook is likely to remain subdued, MOM said, as companies are projecting lower levels of production.
• When it comes to unemployment, the seasonally adjusted resident long-term unemployment rate — referring to the number of people unemployed for at least 25 weeks — dipped slightly from 0.8 per cent last December to 0.7 per cent in March this year.

WHAT ECONOMISTS SAY OF JOB MARKET OUTLOOK
Mr Irvin Seah (DBS): “There will definitely be a slowdown in employment in the near term. The labour market outlook very much depends on the outcome of the trade war. For the Singapore Government, it already provides support to those retrenched but it needs to be prepared to step up its efforts.”
Dr Chua Hak Bin (Maybank Kim Eng):“Companies will be more cautious about hiring for the rest of the year, given the escalating US-China trade war. Employment growth will likely slow, while manufacturing employment will likely remain in contraction for the rest of the year.”
Mr Song Seng Wun (CIMB): “Slower employment growth is likely and companies will be more selective when it comes to hiring. For domestic-oriented services relating to social services, IT security or e-payments, there could be a modest labour demand. But for those highly dependent on trade, they will find it more challenging to make jobs available.”

 

[odie]

I hope the younger voters teach PAP a lesson during GE.

 

[sweetiepie]

KNN how can nus life science grads not able to land a niche market jobs KNN the course will have quotas during enrolment KNN

 

[Valium]

Those with a vagina can consider the @ginfreely trade. She's going places as a whore

 

[Hypocrite-The]

As Singapore relooks 2019 projections, economists warn of possible technical recession
FILE PHOTO: A view of the skyline of Singapore
FILE PHOTO: A view of the skyline of Singapore. (Photo: Reuters)
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SINGAPORE: With policymakers here reviewing their full-year growth projections, some economists have warned that the Singapore economy could grow slower than initially thought, or even risk falling into a technical recession, as the trade spat between the world’s two biggest economies drags on with no clear end in sight.

Earlier on Thursday (Jun 27), central bank chief Ravi Menon said the current 2019 growth forecast of 1.5 to 2.5 per cent is being reviewed by the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS).

While Mr Menon said it remains too early to tell if revisions to the official growth estimate could fall below the lower end of the forecast range, some analysts reckon that the odds have risen.

READ: Singapore reviewing 2019 GDP forecast range amid weaker growth expectations
“If the official forecast revision comes to pass, it can be anyone’s guess (for) 0.5 to 1.5 per cent or 1 to 2 per cent,” said OCBC Bank’s head of treasury research and strategy Selena Ling.

Ms Ling, a long-time watcher of the Singapore economy, pointed out that the review comes just one month after the the original forecast range of 1.5 to 3.5 per cent was narrowed .

“(This) clearly reflects how the external macro-environment has deteriorated since May with the breakdown of US-China trade negotiations and the rising downside growth risks,” she said.

READ: Property market 'more sober' after cooling measures; no need to shift gears significantly: MAS
Comments on a weaker second-quarter growth also “open up a potential can of worms and potentially jeopardises the baseline scenario that the second half of 2019 will see some stabilisation in growth”, she added.

The economy grew by a slower pace of 1.2 per cent year-on-year in the first quarter of 2019 – its lowest growth in nearly a decade.

READ: Singapore narrows 2019 GDP forecast, as Q1 logs slowest growth in nearly a decade
Some economists, including Ms Ling, had previously predicted a modest pick-up in manufacturing - and in turn GDP growth - later in 2019 on the back of favourable base effects. But this has largely dissipated as the trade conflict roils on, threatening to further disrupt global supply chains, delaying firms from their capital expenditure and hiring plans, and worsening business and consumer confidence.

The increasing likelihood of a "tech war" by the US and China have also heightened the possibility of more pain, economists said.

Echoing similar sentiments, CIMB Private Banking economist Song Seng Wun said “foggy” economic data of late – from the double-digit declines in Singapore’s non-oil domestic exports to the wider-than-anticipated slump in industrial output in May – means that a strong rebound in the second half will be needed to make up for growth.

Given how global growth is losing steam amid a protracted trade conflict, however, that would be “a bold assumption” to make, he said.

“It does make sense for the forecast range to be tweaked again. Even if a lower base from last year might help, it would still be a tough environment at this juncture,” Mr Song told CNA.

“It is realistic to lower the lower-end of that range and forecast for 1 to 2 per cent growth instead.”

 

[knowwhatyouwantinlife]

I hope the younger voters teach PAP a lesson during GE.

I hope as well but by population size their numbers wont make much of a dent maybe a 4-5% swing. Remember boundaries are movable. Also somebody needs to buy the huge oversupply of pigeon holes in slumggol nishun tengcar

 

[zhihau]

I hope the younger voters teach PAP a lesson during GE.

Don’t just hope, talk to people, let them understand the implications of the 2/3 majority.

 

[Hypocrite-The]

IMF cuts forecast for Singapore's 2019 economic growth to 2%
A passer-by looks at her mobile phone as people take a selfie photo, with Singapore's central business district skyline, on May 10, 2019. (File photo: Reuters/Kevin Lam)
16 Jul 2019 01:11PM
(Updated: 16 Jul 2019 01:31PM)
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SINGAPORE: The International Monetary Fund (IMF) has trimmed its 2019 economic growth forecast for Singapore to 2 per cent from 2.3 per cent, the Washington-based lender said on Tuesday (Jul 16), as global trade tensions hit exports from the city-state.
READ: Singapore not expecting a full-year recession at this point, says DPM Heng Swee Keat
"Given global trade tensions, support from external sectors is expected to fall and growth drivers are projected to shift back to domestic demand," the IMF said.
"Risks to the outlook are tilted to the downside and mainly stem from external sources, including a tightening of global financial conditions, escalation of sustained trade tensions, and deceleration of global growth."

 

[Leongsam]

2% is excellent given the current conditions. For that we have to thank the PAP.

 

[bobby]

DPM Heng Swee Keat: S’pore not expecting a full-year recession yet

Economic growth has slowed down for Singapore, according to the Ministry of Trade and Industry on July 12.

Singapore’s economy shrank 3.4 percent in April to June 2019 from the previous three months, and grew by only 0.1 percent year-on-year.

No recession yet

These figures have sounded alarm bells among Singaporeans.

In response, Deputy Prime Minister and Minister for Finance, Heng Swee Keat, wrote in a Facebook post on July 12 addressing the speculation of a recession

Heng said the government is not expecting Singapore to enter a full-year recession yet, with some sectors doing better than others, such as information and communications, as well as construction.

Focus on medium and long term

While a technical recession could be inevitable, Heng reminded Singaporeans to focus on medium- and long-term challenges.

This is so as Singapore’s workforce and economy remain resilient and can seize opportunities in time to come.

This includes helping businesses to transform, expanding into new markets and acquiring new skills.

A technical recession is defined as two straight quarters of quarter-on-quarter contraction.

Minister of Trade and Industry, Chan Chun Sing, likewise wrote in a separate Facebook post on July 12:

Heng also assured that the government is monitoring the situation closely and is working with employers and unions to make necessary preparations.

 

[knowwhatyouwantinlife]

Why is heng insisting there is no recession this year? Wouldn't 2 quarters of contraction signals a technical recession? A technical recession is still recession...but this spanner in the works is good let's see how they will run their election campaign..parliament dissolves 15 April 2021

 

[hofmann]

Why is heng insisting there is no recession this year? Wouldn't 2 quarters of contraction signals a technical recession? A technical recession is still recession...but this spanner in the works is good let's see how they will run their election campaign..parliament dissolves 15 April 2021

He said specifically full year recession. But probably ruling out more than 2Qs of contraction. So Q2 and Q3 should be bad with upswing end of the year

Their numbers should be quite zhun barring a black swan

 

[knowwhatyouwantinlife]

He said specifically full year recession. But probably ruling out more than 2Qs of contraction. So Q2 and Q3 should be bad with upswing end of the year

Their numbers should be quite zhun barring a black swan

Thanks for explaining so what comes after 3 consecutive quarters of contraction?

 

[hofmann]

Thanks for explaining so what comes after 3 consecutive quarters of contraction?

Other than a full year recession?

Elections!

 

[Hypocrite-The]

Singapore exports slump even further, down 17.3% in June
Container cranes are pictured at the port of Singapore. (File photo: Reuters/Feline Lim)
17 Jul 2019 08:31AM
(Updated: 17 Jul 2019 09:00AM)
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SINGAPORE: Singapore's non-oil domestic exports (NODX) fell by 17.3 per cent year-on-year in June, marking the fourth straight monthof double-digit decline, data from trade agency Enterprise Singapore showed on Wednesday (Jul 17).
This was worse than the 9.9 per cent contraction predicted by 10 economists in a Reuters poll.
Both electronic and non-electronic exports declined, with shipments to the majority of top markets falling.
READ: No quick turnaround in Singapore's exports, more downside risks in 2019 growth: Economists
On a month-on-month seasonally adjusted basis, NODX declined by 7.6 per cent in June, after the previous month's 5.8 per cent increase.
Electronic exports fell 31.9 per cent year-on-year, following the 31.6 per cent decrease in the previous month.
Integrated circuits (ICs), PCs and disk media products contracted by 33 per cent, 44.6 per cent and 41.7 per cent respectively, contributing the most to the decline in electronic NODX.
Non-electronic exports declined by 12.4 per cent in June, following the 11.1 per cent decline in the previous month.
Non-monetary gold (-50.2 per cent), petrochemicals (-16.7 per cent) and pharmaceuticals (-11.3 per cent) contributed the most to the decline in non-electronic NODX.
Total trade decreased by 7.2 per cent year-on-year in June, following a 2.2 per cent decline in the previous month.
Both imports and exports declined, with imports decreasing by 4.8 per cent and exports decreasing by 9.3 per cent.
Overall, exports to the majority of Singapore's top markets decreased in June, execpt for the United States.
The largest contributors to the NODX decline were Hong Kong (-38.2 per cent), China (-15.8 per cent) and the EU 28 (-22.1 per cent).

 

[Hypocrite-The]

Commentary: Singapore and the dreaded R word - recession
Bad news is good news for the prepared, says Singapore Business Federation CEO Ho Meng Kit.
File photo of a manufacturing facility in Singapore. (Photo: AFP/Roslan Rahman)Share this content
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SINGAPORE: The R word has been in the headlines and conversations of late, especially in the wake of the latest gross domestic product(GDP) flash data showing almost flat growth in the second quarter of 2019.
The figures paint a grim picture. At 0.1 per cent year-on-year, the advance estimates, based on preliminary numbers from April and May, marks the slowest growth rate since the global financial crisis in 2008.
Dragged down by the manufacturing sector, it was a much sharper slowdown than expected, well below the growth estimate of 1.1 per cent put forth by private economists in a Bloomberg poll.
Retail sales figures, released the same day, showed a slide for the fourth straight month with a 2.1 per cent drop in May.
The lacklustre data sent economists scrambling to trim Singapore’s full-year growth forecasts for 2019 to as low as zero to 1 per cent, with some flagging the heightened possibility of a technical recessionand even risks of a deeper recession this year.
A STORM BREWING FOR SOME TIME
While it’s best to leave the tricky job of recession forecasting to the economists, what is clear is that a storm is – and has been – brewing on the horizon for some time now.
Trade tensions, slowing Chinese growth, and a messy and uncertain Eurozone have cast a shadow on an increasingly strained global economy.
READ: Singapore trade, disrupted, (not) business as usual, a commentary
As a small, open economy with trade three times of our GDP, Singapore’s slowdown is inevitable, given the global investment and trade climate.
The US-China trade war has spooked markets worldwide and raised concerns about the global economy. (Photo: AFP/JOE RAEDLE)READ: Few options for China in next phase of Trump’s trade war, a commentary

But as Minister for Trade and Industry Chan Chun Sing pointed out, Singapore’s current economic challenges also run deeper than the previous financial crises.
Beyond the tail-end of a mature economic cycle, Singapore is now dealing with longer-term shifts in supply chains and production patterns.
Underlying Singapore’s slowdown may also be deeper structural issues such as declining productivity growth, slowing population growth, rising costs and weak innovation capacity.
BAD NEWS IS GOOD NEWS FOR THE PREPARED
It’s hard to tell if the slowdown will eventually lead to a recession, but the news certainly serves as a timely wake-up call for the business community not to be complacent and to persist with transformation efforts, making the most of the opportunities still abundant in the region.
As external factors play out more clearly in the next few months, I urge businesses to stay vigilant and monitor the situation closely.
LISTEN: The Pulse - A rougher ride ahead? The outlook for the Singapore economy
Like a forest fire that clears out dead brush, leaner times can also be fertile ground for innovation and new growth.
Singapore's skyline. (File photo: AFP/Roslan Rahman)
Our companies should continue to innovate and transform, leveraging the various initiatives already in place, such as the Industry Transformation Programme announced in 2016.
Under the programme, Industry Transformation Maps (ITMs) have been developed for 23 industries, covering over 80 per cent of Singapore’s GDP. Taking a targeted and industry-focused approach, these roadmaps are critical in enabling our SMEs to prepare for the future.
The Government has also stepped up support through this year’s Budget measures, which are focused on helping our companies adapt and remain competitive by building deep enterprise capabilities.
READ: The Singapore Budget and Heng Swee Keat’s shift away from Big Government, a commentary
Take for example the SMEs Go Digital, which aims to help companies employ digital technology, build capabilities so they can participate in the growing digital economy or the Innovation Agents Programme which supports businesses in their innovation efforts to accelerate their growth.
When it comes to tapping regional and global opportunities, companies can tap on the newly launched Scale-up SG, a 2.5-year programme that aims to help aspiring, high-growth companies to scale rapidly and expand abroad.
BRIGHT SPOTS REMAIN
In Parliament earlier this month, Minister Chan also called on our companies to see the world as their hinterland, instead of being limited by Singapore’s geographical size or location.
Trade and Industry Minister Chan Chun Sing speaking in Parliament on Jul 8, 2019.
Despite the turbulence rocking the global economy, bright spots remain in our region.
ASEAN has fared relatively well. In the first quarter of 2019, Indonesia, Malaysia and Vietnamrecorded 5.1 per cent, 4.5 per cent and 6.8 per cent growth respectively.
As trade with external markets stumble, it is increasingly important for ASEAN to tap on servicing intra-regional markets and Asia’s rising middle class and strengthen its position as an attractive single market.
The ASEAN e-Commerce Agreementsigned last year should also facilitate growth in ASEAN’s digital economy, valued at US$240 billion by 2025. Other measures notched under ASEAN’s belt last year also include the launch of the ASEAN Single Window for faster customs clearance regionally.
To help our companies internationalise, the Singapore Business Federation has ramped up our Free Trade Agreement outreach, education efforts and overseas markets activities in the region.
Next month, we will be organising the fifth edition of the Singapore Regional Business Forum, along with the inaugural Singapore Regional Infrastructure Summit which connects our companies to regional infrastructure opportunities.

 

[Hypocrite-The]

Commentary: What slowing growth means for the man in the street
OCBC Bank’s Selena Ling answers your frequently asked questions over news on the outlook for the Singapore economy.

What slowing growth means for the man in the street
(Photo: Unsplash/Andi Rizal)
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SINGAPORE: The big news two weeks ago was that Singapore’s economic growth had slowed to 0.1 per cent in the second quarter of this year – the slowest seen in a decade.

The main drag was manufacturing, with the electronics and precision engineering sectors especially affected.

I myself was surprised by how weak the growth data was, which was way below what even the most bearish economist was predicting.

For non-economists, let’s cut through the statistics being hurled to and fro.

Here is my take for ordinary folks out there:

QUESTION: AS AN AVERAGE SINGAPOREAN, SHOULD I BE WORRIED?

I’m with the Ministers who’ve taken to Facebook on this one. The decade-low growth has triggered some concerns that a recession is headed our way, and the possibility is indeed real. But don’t panic – yet.

There may be a potential technical recession, which is a sequential slowdown that stretches into the third quarter.

What it might possibly lead to in a worst-case scenario is a full-blown, year-long decline where annual growth contracts drastically as compared to 2018. But I don’t think we are quite there yet, although everyone does expect a softening this quarter.

LISTEN: The Pulse - A rougher ride ahead? The outlook for the Singapore economy
Here’s what you should be worried about: Globally, all the key engines of economic growth are showing signs of misfiring.

Worryingly, China, Japan and South Korea – an important window into indications for the world’s trade outlook – have all reported year-on-year falls in exports.

This could be a reaction to the US-China trade spat. While the two parties have restarted talks, this may continue to drag on.

The US-China trade war has spooked markets worldwide and raised concerns about the global economy
The US-China trade war has spooked markets worldwide and raised concerns about the global economy. (Photo: AFP/JOE RAEDLE)
READ: Here’s why the US-China trade war won’t cool down anytime soon, a commentary
Domestically, growth momentum in the construction and the services sector have also sharply moderated compared to a quarter ago. The latter suggests that both businesses and consumers are turning more cautious.

The extent of this sobering news means that Singapore, being a small and open economy, is definitely being affected by what goes on externally. The ongoing US-China trade war and China’s growth moderation, for instance, have dented Singapore’s growth prospects.

Here are the silver linings: Globally, interest rates are softening in line with the global growth slowdown, and domestic interest rates are likely to follow. This could mean less pressure for companies and individual borrowers to service their loans.

Also, given the deteriorating growth outlook and softening inflationary prospects, the Monetary Authority of Singapore (MAS) may contemplate adjusting its current monetary policy stance at its October meeting.

One possible option is that it may flatten the slope or the pace at which the trade-weighted Singapore dollar can appreciate. If the Singapore dollar is softer on a trade-weighted basis, then our exports will be priced relatively more competitively, but our imports will also cost more.

In addition, there is ample fiscal firepower to plan for a more expansionary Singapore Budget in 2020, which would help stimulate the Singapore economy.

QUESTION: AS A CONSUMER, SHOULD I TIGHTEN MY BELT?

Not yet. If you’re gainfully employed, don’t feel compelled to immediately cut back on spending on your daily necessities.

people in orchard road
People cross a traffic junction in the Orchard Road shopping district in Singapore on May 27, 2017. (File photo: AFP/Roslan Rahman)
Where you’d like to be more cautious is on luxuries, given that we don’t know just how the third and fourth quarter growth will pan out yet.

And let’s not forget that our second quarter figures are also based on estimates premised on how things have been in the first two months of the quarter. The final verdict for that quarter could still be adjusted when the June economic data is released.

Now, there’s a double-edged sword when it comes to the question about spending. Realistically, if everyone cuts down at the same time, it could push us into a recession for real.

READ: Singapore and the dreaded R word - recession, a commentary
My advice is to be careful and to keep an eye out for what’s happening. Quiz yourself on how to recession-proof your job.

The question you must ask is how you can add value to the company you work for and remain on firm ground, which brings me to my next point.

QUESTION: AS A WORKING ADULT, SHOULD I FEAR FOR MY JOB?

My answer is two-fold. One, look at how employers typically react; two, it depends on what industry you’re in – up to a point.

First, your boss is not likely to say “wow, the GDP growth is so bad, so let’s start firing people now”. Typically, employers take a longer-term view than that.

READ: Singapore trade, disrupted, (not) business as usual, a commentary
man, worker, employee walking carrying a briefcase
(Photo: Unsplash/Ryoji Iwata)
Given the headwinds, companies – especially small and medium-sized enterprises – might be cautious and put the brakes on any new hiring or investment plans. Job-seekers should be prepared for that.

READ: What 2019’s graduating jobseekers need to know – four recession-proof strategies, a commentary
But if you already have a job and are a productive worker, your boss will know that, when things improve, looking for good talent is difficult in a still-tight labour market. That would hamper their growth and profit plans for when growth ramps up.

Ultimately, it may be “harder to rehire than fire” in a knowledge-based economy.

That said, you might want to take stock if you are in manufacturing or any other industries facing challenges – particularly those that are part of the value chain of companies that are increasingly automating production so that fewer workers are needed.

I’ve said in the past that folks in this sector must look at upgrading their skills, and even consider reskilling.

 

[Hypocrite-The]

What Singapore’s slowing GDP growth means for the jobs market
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Office workers at Raffles Place in Singapore. (File photo: Marcus Mark Ramos)
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SINGAPORE: As Singapore’s outlook darkens with growth cooling to levels last seen a decade ago, there could be more retrenchments and fewer job vacancies ahead, said economists.

The job losses will likely come from outward-oriented sectors, which have been hit by a protracted trade spat between the United States and China.

Already for the first quarter, data from the Ministry of Manpower (MOM) showed an increase in retrenchments – from 2,510 in the previous quarter to 3,230 – on the back of a near three-fold jump in job losses in the manufacturing sector.

The economy grew 1.1 per cent year-on-year during the first quarter but amid falling factory activity and exports, growth in the second quarter slowed sharply to a decade-low 0.1 per cent on a year-on-year basis based on recent flash estimates.

READ: What slowing growth means for the man in the street, a commentary
DBS senior economist Irvin Seah said it is “pretty clear that the outlook for the labour market isn’t going to be great” given the “drastic” growth slowdown. “You can only expect retrenchments to pick up and job vacancies to decline in the coming quarters.”

Manufacturing will continue to shed jobs in the coming quarters, with the unpredictable trade spat coinciding with a fading global electronics cycle, experts said.

“The downturn in the electronics cluster has resulted in cutbacks in electronics sector jobs, which is expected to continue during the second half of 2019,” said Mr Rajiv Biswas, chief economist for Asia Pacific at data firm IHS Markit.

The manufacturing sector, which accounts for one-fifth of the economy, is also seeing old jobs being made obsolete by automation, added Mr Seah.


Beyond manufacturing, economists are also keeping a cautious eye on the outward-oriented services sectors.

While electronics accounted for 18 per cent of the retrenchments in the first quarter, services industries such as wholesale trade and transportation and storage followed close behind with 16 and 10 per cent, respectively, MOM’s labour report showed.

READ: Retrenchments grow in Q1 as manufacturing takes a hit: MOM
While domestic services segments can offer support, they make up relatively smaller shares of growth and “may not be enough to offset the receding tide”, said Mr Seah, referring to the sector’s 1.5 per cent quarter-on-quarter dip in the second quarter on a seasonally adjusted basis.

Further weakness in services is “the bigger worry”, added the economist, given how the sector accounts for about two-thirds of the economy and employment, although the tightening of foreign manpower quotas from January 2020 may mitigate the fallout on this front.

Meanwhile, “undercurrents” like the recent job cuts at German banking giant Deutsche Bank will add to the retrenchment figure in the third quarter, said CIMB private banking economist Song Seng Wun.

READ: As Singapore relooks 2019 projections, economists warn of possible technical recession
“UNEVEN” LABOUR MARKET

Still, even as prospects are set to sour in certain sectors and translate into higher layoffs, some economists were quick to add that job opportunities remain.

Mr Song pointed to sectors that have remained resilient thus far, such as modern services on the back of a Government-led push in digitalisation.

“We now have a strange landscape where headline growth numbers look quite discouraging but underneath, there are pockets of strength,” he said.

“This will be reflected in terms of how retrenchments will continue to edge up, reflecting the moderation in external demand, yet growth in certain pockets will continue to create jobs.”

Likewise, Mr Biswas said the structure of employment growth by sectors will remain “very uneven”, with positive growth in “new economy jobs”.

These include infocomm technology, buoyed by a digital revolution and industrial automation, as well as enhanced cybersecurity needs. Financial services is also benefiting from Singapore’s role as a leading hub for segments such as asset management, financial technology and insurance.

Manpower Minister Josephine Teo, in a Facebook post after the release of dismal second-quarter flash estimates on Jul 12, noted that there are still 60,000 unfilled vacancies despite the growth slowdown.

About half of them are for professionals, managers, executives and technicians (PMETs) in sectors like financial services and professional services.

READ: Singapore not expecting a full-year recession at this point, says DPM Heng Swee Keat
When asked for a further breakdown, MOM said nearly 70 per cent of the PMET vacancies come from financial services (4,400), public administration and education (4,900), professional services (3,400), infocomm technology (3,300), wholesale trade (2,400), and health and social services (2,400). The other PMET roles are “distributed across many other sub-industries”, the spokesperson said.

The remaining 30,000 unfilled jobs are for non-PMETs, which are “more or less equally distributed between clerical, sales and service workers and production and related workers”.

Food and beverage services (3,100), construction (2,400), transportation and storage (2,300), retail trade (2,000), security and investigation (1,500), accommodation (1,400), health and social services (1,200), and cleaning and landscaping (1,100) made up the bulk of these positions.

About one in three vacancies are unfilled for at least six months, with non-PMET jobs generally harder to fill, according to MOM.

office workers raffles place singapore file photo 2
Office workers at Raffles Place in Singapore. (File photo: Marcus Mark Ramos)
JOBS NOT FOR EVERYONE?

Two recruitment firms – Hays and Robert Walters – that CNA approached said they have not seen a rise in jobseekers, though the former said “retrenchment has become an increasingly common reason” among its applicants.

They also have not noticed any hiring sentiment change among businesses as yet.

Demand for tech talent, in particular, has been strong across all industries and will remain so as demand outweighs supply, said Robert Walters Singapore’s managing director Rob Bryson.

However, there may be some who will have a harder time looking for jobs.

“Generally, we observe that older employees among PMETs will find it more difficult to find a job because of technological disruption and a slowing economy,” said Mr Bryson.

READ: MOM to focus on career mobility for all workers
PMETs accounted for nearly 70 per cent of the retrenched residents in the first quarter. They continue to make up the majority of layoffs as they form a higher share of the local workforce, said MOM.

The same labour report also showed PMETs and degree holders continuing to observe below-average re-entry rates into employment, although their rates have trended up from the first quarter of 2018.

As the jobs market outlook softens in the months ahead, PMETs will likely continue to bear the brunt, economists said.

One issue is the job-skill mismatch.

Referring to the “new economy jobs” in infocomm technology and others, Mr Biswas said: “The jobs being created in these sectors are skilled and specialised, resulting in a skills mismatch for workers leaving other sectors.”

Mr Seah, who has written reports on PMETs becoming an “exceptionally vulnerable” segment in the labour market here, added that PMETs typically develop deep skillsets required for their roles. This makes it difficult for them to transit into other industries.

Those with higher financial obligations, especially middle-aged PMETs, will also find it hard to accept lower-paying jobs, he added.

In her Facebook post, the Manpower Minister had said there is no shortage of programmes to support willing workers in their transition.

She cited the more than 100 Professional Conversion Programmes in over 30 sectors, as well as Career Trial programmes that aim to help jobseekers gain experience through short-term work trials.

 

[Bad New Brown]

I like recession because this is a good time to see who are the real survivors in long term economic downturn