By Goh Chin Lian, Senior Political Correspondent

UNION leaders, concerned about uncertain economic prospects in the coming months, hope the Jobs Credit scheme will be withdrawn gradually instead of at one go.

Labour chief Lim Swee Say told The Straits Times that although layoffs have eased and some bosses are recruiting again, recovery remains uneven across sectors.

Union leaders from manufacturing in particular do not wish to see a complete removal of the wage subsidy, in case the recovery 'takes longer to gather strength', he said.

Mr Lim's comments come two weeks ahead of when the Government is expected to say whether it is extending the Jobs Credit scheme beyond December, and if so, in what form.

The $4.5 billion scheme aims to help employers hold on to workers despite the recession, and was meant to last one year.

For every resident worker on their Central Provident Fund payroll, bosses get 12 per cent on the first $2,500 of the employee's monthly wage.

Economists credit the scheme with averting layoffs: Associate Professor Tilak Abeysinghe from the National University of Singapore has estimated that it could save more than 120,000 jobs over three years.

But Singapore's outlook remains uncertain because its key markets, like the United States and Europe, are still reporting weak industrial production and consumption. Unemployment in both regions is expected to rise beyond 9 per cent.

The weak external demand is felt most keenly in the electronics sector. United Workers of Electronic and Electrical Industries general secretary Cyrille Tan said that in good years, companies would know by October what orders there would be for the first three months of the following year.

'This year, orders are up to only December,' he said.

Nanyang Technological University economist Tan Khee Giap noted that electronics has fared worse than, say, pharmaceuticals manufacturing. Uneven recovery is also seen in the services sector: Hotel occupancy is up, but financial services remains slow.

Some economists worry that continuing the Jobs Credit scheme will distort business decisions and erode economic competitiveness.

Labour chief Mr Lim disagreed: Uncompetitive companies must upgrade to become better or relocate to become cheaper, with or without Jobs Credit, he said.

The scheme has also helped competitive firms hold on to skilled and experienced workers, in preparation for an upturn, he noted.

Dr Tan suggests a way to wean employers off Jobs Credit and focus on restructuring: Just keep the scheme for six more months.

'Six months is not too long. It gives uncertainty so people won't count on it too much, sit pretty and not do the right thing,' he said.

This article was first published in The Straits Times.