More layoffs loom and may linger next year
PM Lee: Singapore's workforce still the best in the world
Mr Lee: Says Singapore is in a strong position to meet challenges ahead -- BT IMAGE
(SINGAPORE) Layoffs in the unionised sector this year are tipped to be at least 20 per cent higher than in 2010, even as the economy is on track to grow at around 5.0 per cent, Prime Minister Lee Hsien Loong said yesterday.
The retrenchment outlook for next year, when the official economic growth forecast has been trimmed to 1-3 per cent, will be 'even more uncertain', he said at the opening of the NTUC Delegates' Conference.
As a crisis of confidence grips Europe, Asia is feeling the effects. There are already signs that Singapore's economy is losing its growth momentum, Mr Lee noted.
Shorter work-week and temporary layoffs are rising, he said. 'The unionised sector expects overall retrenchment to be at least 20 per cent higher than last year; 2012 is even more uncertain.'
NTUC's Assistant Secretary-General Cham Hui Fong told BT that unionised companies account for about 40 per cent of the national workforce. She expects more retrenchments in the non-unionised sector, too.
Many of the layoffs could take place in the final quarter of the year, data suggests.
Figures from the Ministry of Manpower show that nationally, 7,740 workers were retrenched in 2010. An estimated 5,510 were axed in the first nine months of this year. These included unionised as well as non-unionised workers.
Mr Lee's assertion that the unionised sector could see a jump in layoffs this year would suggest that a large chunk of the workers could be let go in the fourth quarter.
Wu Kun Lung, an economist at Credit Suisse, added that layoffs in the non-unionised sector should be greater because it represents a bigger number of workers - and these workers are not protected by unions. The NTUC has already moved to minimise the cuts in the unionised sector by offering training assistance to employers who keep their surplus workers.
Meanwhile, economists such as DBS Bank's Irvin Seah and Bank of America Merrill Lynch's Chua Hak Bin point out that labour remains scarce - and job creation, while slowing, is still in positive territory.
The suggestion is that with a tighter labour market out there and leaner headcounts within, employers are more likely to fight a slowdown in the economy with early cost cuts than with the jobs axe.
Mr Lee noted that since the last Delegate's Conference in 2009, the global economy has recovered somewhat but remained troubled.
And while Singapore is likely to post growth of around 5.0 per cent this year, he said the outlook has turned cloudy because of slow growth in the United States and, more critically, a crisis of confidence in Europe.
'The Europeans will probably muddle through this time, but even then there will be a drag on the global economy,' Mr Lee said of their sovereign debt problems. Singapore can live with that. 'But there's still some chance that things will go wrong - and that would be very bad for the world, including us in Asia,' he said.
Mr Lee said the best defence of jobs in this tough times is to stay committed and connected to an open world - and to keep up with the push for higher productivity growth.
'Externally, we must continue to support pro-trade and pro-investment stance,' he said.
Mr Lee reported that Singapore is making good progress with the Trans-Pacific Partnership free trade arrangement, which has attracted many Asia-Pacific countries, including the US.
Asean, of which Singapore is a member, is on track to become an economic community by 2015.
Mr Lee said Singapore is in a strong position to meet the coming challenges - it has the best workforce in the world; it has robust institutions and good infrastructure; it has high international reputation; and it has a healthy, functioning model of tripartism.
The three-day Delegates' Conference, which ends tomorrow, is likely to see a leadership renewal in the NTUC and a new direction taken by the labour movement in the next four years.
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