Singapore jobless rate falls to five-year low

For those of you out there worried that the government is manipulating official statistics, don't worry it's perfectly normal. Whenever you see the phrase 'official statistics' always ask how is the phenomenon in question defined and how does any change in the definition effect the result - especially a few months away from a general election.

By John Burton in Singapore
Published: February 1 2006 10:43

Singapore said on Wednesday its unemployment rate last year fell to a provisional 3.2 per cent, the lowest since 2001, although the figure was flattered by a recent change in how the data was measured.

The improving job data and a new government survey saying manufacturers were optimistic about the outlook for the first half of 2006 is expected to increase chances of the government calling a general election soon.

In the fourth quarter, the unemployment rate fell to a seasonally adjusted 2.5 per cent due to a stronger economy and increased hiring in the services sector.

However, the jobless rate among Singapore citizens and permanent residents remained higher at 3.3 per cent in the fourth quarter after peaking at 4.5 per cent in June.

The government decided last year to revise the measurement of unemployment to include foreign workers who have temporary work permits, including construction workers living on site and those who commute to Singapore from Malaysia.

"The revision has the effect of reducing the overall unemployment rate as...(the) total labour force is now larger, taking into account full coverage of the foreign workforce," said the ministry of manpower, which compiles the statistics.

Unemployment rates for foreign workers are lower since they normally lose their work permits and can no longer stay in Singapore if they become jobless.

The ministry said the revision was needed to establish a common methodology for government statistical surveys.

The jobless rate is closely watched when there is a growing debate about a widening gap between rich and poor, with elderly unskilled workers having a tougher time finding new jobs as Singapore moves towards higher-valued manufacturing.

The government also recently revised upward last year's economic growth rate to 6 per cent from 5.7 per cent after it recalculated data, as it does every five years.

Singapore's jobless rate before the 1997-98 Asian crisis was around 2 per cent, but climbed to a peak of 5.2 per cent in 2003 for residents before declining again.

A recent recovery in manufacturing and stronger growth have cut the jobless rate in the last two years. The economy is expected to expand by at least 5 per cent this year, according to private economists.

The number of new jobs increased to 110,000 last year, the strongest increase in nearly five years, due to a growing services sector and a recovery in construction.

The government wants to add service jobs by opening two casino resorts to balance an overall decline in manufacturing jobs.

Singapore's manufacturing sector employs about 18 per cent of the 2.1m workforce, down from a third in 1995, and more retrenchments are expected as companies shift production to China and Malaysia.

Employment in the electronics sector, Singapore's biggest manufacturing industry, is expected to increase slightly this year due to increased global demand, the government said in its latest survey on business confidence among manufacturers.