FAR fewer workers lost their jobs last year as the economy recovered, but Singapore's manufacturing sector workers remain vulnerable to layoffs, according to a Manpower Ministry report yesterday.

It showed that 9,800 workers were laid off last year, a significant drop from the 23,430 who lost their jobs in the recession year of 2009.

The rate of layoffs - at 5.7 workers for every 1,000 employees - was also the lowest since the ministry's Redundancy and Re-employment data series began in 1998.

In fact, the manufacturing sector, which was hard hit by the 2009 recession, recorded the largest drop in the number of workers laid off. This came mostly from the electronics, machinery and transport equipment sectors.

Yet, manufacturing workers are still more likely to be retrenched or have their contracts terminated early, the report said.

Last year, 12 workers were laid off for every 1,000 employed in manufacturing. This compares with 3.5 for services and 5.4 for construction.

This is because of the fast pace of competition in the industry, said Associate Professor Tan Khee Giap of the Lee Kuan Yew School of Public Policy.

'There are all these technological movements and shake-ups. You have to keep training yourself, keep up to date, for if you don't, you will be forced to close shop.'

Labour economist Shandre Thangavelu of the National University of Singapore said rising commodity prices and external shocks, like the Japan earthquake and political uncertainty in the Arab world, also affect the production of goods.

The ministry report also said that overall, layoffs fell across all occupational groups.

The effects of the 2009 recession had mostly receded by last year, thus accounting for the drop in layoffs. Companies said the layoffs last year were more a result of reorganisation and restructuring for greater efficiency.

The data in the report also showed that locals - Singaporeans and permanent residents - made up a smaller proportion of those who lost their jobs last year.

They comprised 58 per cent of workers laid off last year, a drop from 62 per cent in 2009.

The good news is that more were also getting new jobs in a shorter period of time after being laid off.

Two in three locals who were laid off in the first nine months of last year were re-employed by December. Among them, slightly more than half found a new job in less than a month.

Meanwhile, the outlook for manufacturing is 'positive' for the rest of the year, said Mr Gwee Seng Kwong, secretary-general of the Singapore Manufacturers' Federation. He said this is because the industry is 'slowly but surely' investing in more automation and upgrading worker skills to deal with changes to product demand.