The labour market is likely to stay tight for the rest of the year, as the government continues reducing the inflow of foreign workers and pushes for higher productivity.

"We will continue to press on with restructuring for quality economic growth that will generate good job opportunities for Singaporeans," said Acting Minister for Manpower Tan Chuan-Jin yesterday.

More jobs were created in the April-to-June quarter. The economy gained 33,700 more jobs during the second quarter, up from 28,900 in the first three months.

This is despite the unemployment rate - at 1.8 per cent last December - having climbed from 1.9 per cent in March to a seasonally adjusted 2.1 per cent in June.

The job growth brought total employment to 3,420,200 in June, up 4 per cent from a year ago, said the Labour Market report for the second quarter released yesterday by the Ministry of Manpower (MOM).

The report said: "The labour market is expected to remain tight for the rest of the year.

"Unemployment should remain low, though it is likely to increase as the pace of restructuring picks up.

"Given the momentum in employment growth and time needed for productivity improvements to moderate manpower demand, employment growth for the year is likely to be high, similar to that observed last year."

The MOM report comes two days after recruitment firm Manpower's quarterly poll indicated that Singapore would be among a handful of countries likely to see strong hirings in the next three months.

The number of layoffs went up in the second quarter to 3,080, from 2,120 in the first.

But the MOM report noted that the 3,080 figure was still lower than the highs of between 5,980 and 12,760 layoffs in each quarter during the recession of 2008 to 2009.

There are still more job openings than job seekers. The seasonally adjusted ratio of job vacancies to jobless persons was 112 to 100 in June - though the number has eased a bit; half the workers (51 per cent) retrenched in the first quarter had landed new jobs by June.

The tightened policy on foreign workers has taken effect: the number of new jobs taken up by foreigners fell from 34,100 in the first half of last year to 27,000 in the corresponding period this year.

MOM said in a statement: "This was the smallest growth since the first half of 2010, reflecting the continued fall in the number of Employment Pass holders and slower growth in Work Permit and S Pass holders."

The growth was largely driven by infrastructure projects and housing developments in the construction sector.

More new jobs went to locals than to foreigners in the first half of this year; employment for locals rose by 34,100, up from 22,800 a year ago.

In anticipating a tight labour market for the rest of the year, MOM noted that the Ministry of Trade and Industry has raised Singapore's Gross Domestic Product growth forecast for the year to between 2.5 and 3.5 per cent.

MOM said: "Labour demand in the services sector is expected to be strong. In particular, labour demand from accommodation and food services and retail trade will likely increase in the second half of the year, reflecting the seasonal pickup during the year-end festivities."

It is likely to be bolstered by the opening of shopping malls and hotels by the year's end.

Given the ongoing public infrastructure development, strong job creation is also expected in the construction sector, said MOM.