SOME 64,000 workers were jobless in March, as the unemployment rate rose slightly to 2.1 per cent in the first quarter of this year.

There were also fewer job vacancies - 50,000 in March - against the backdrop of a softening labour market, the Ministry of Manpower said when it released its first-quarter labour market report yesterday.

While the ministry said manpower shortages have eased, some economists worry that structural changes to the economy could make it harder for those out of work to re-enter the workforce.

According to the report, total employment rose by 27,200 to 3,255,700 in March, even as the unemployment rate crept up to 2.1 per cent that month from 2 per cent in December last year.

Of the 64,000 people out of work in March, up from 60,500 in December, four in 10 were aged above 40.

With higher unemployment and fewer job openings - 50,000 in March versus 55,400 in December - there were fewer jobs available for every jobless person last quarter. For every 100 job-seekers, there were 105 jobs in March, down from 120 in December, the ministry said.

The report will bring some relief to businesses that have been struggling with an acute labour shortage for some time now, but economists that delved deeper into the numbers had mixed reactions.

Singapore Management University economics professor Hoon Hian Teck said the labour market held up rather well in the first quarter, despite the general weakness of the United States economy and euro zone troubles.

He attributed the holding back on hiring to the fact that companies are cautious and uncertain about how the future will unfold.

But DBS economist Irvin Seah said the report is worrying. 'There are signs that this is only the start of difficult structural changes to the economy,' he said, singling out the higher long-term unemployment rate as a cause for worry.

Among those jobless, nearly one in five - or 14,000 - had been looking for work for at least six months, up from 11,800 a year ago, according to the ministry.

'More can be done to help this group acquire the skills to fill the job vacancies,' said Mr Seah.

Writing in his blog yesterday, Minister of State for Manpower Tan Chuan-Jin said his ministry and the Singapore Workforce Development Agency are already paying attention to those who face long-term unemployment.

He pledged more help for them so they can pick up new skills to take up jobs in the same or different industries.

On the outlook ahead, UniSIM Associate Professor Randolph Tan said a slowdown in employment for the rest of the year, and probably into the next, can be expected.

'Employment has already passed its peak in the fourth quarter of last year,' he said.

SMU's Prof Hoon said the euro zone crisis, if unresolved, would have a negative impact on Singapore's labour market.

But while more people may be seeking work, Mr Chan Chong Beng, president of the Association of Small and Medium Enterprises, said most SMEs still face difficulties finding workers 'because some still shun work in the sector'.

'We have to either bite the bullet to restructure and boost productivity, or be prepared to ship out,' he said of the efforts to ride out the uncertain economic situation.