By Zakir Hussain

SINGAPORE'S job market is showing signs of a turnaround on the back of an economy that registered a growth spurt in recent months, employment figures released yesterday confirmed.

Total employment rose faster than expected, according to the Manpower Ministry's preliminary estimates of the jobs situation for July to September.

The 15,400 jobs added between July and September this year actually reverses the 13,900 jobs lost up till June this year.

Pointing to this, Dr Chua Hak Bin, head of Singapore research at Citi, said: 'The jobs recession is over. Losses were far lower compared to past recessions.'

But the ministry pointed to a slight rise in unemployment: Overall unemployment rose to 3.4 per cent from 3.3 per cent in the previous quarter.

Among residents, it was 5 per cent - still below the 6.2 per cent peak six years ago. This means 100,300 citizens and permanent residents were jobless. The previous high was 109,100 in September 2003.

Analysts said this apparent contradiction of jobs growth coupled with high unemployment, stems from more residents feeling encouraged to enter the market because of positive signs of growth.

'People tend to return to the labour force during the early stages of an economic recovery to seek jobs, but employers are generally reluctant to expand hiring until demand looks stronger,' said Nanyang Technological University (NTU) economist Walter Theseira.

Another reason for the rise in unemployment, said National Trades Union Congress deputy secretary-general Halimah Yacob, could be the mismatch between skills and jobs.

'Most job losses are in manufacturing, whereas most of the jobs created are in the services sector,' she explained. 'It is harder to train an engineer who has worked 20 years in a manufacturing company for a job in the services sector.'

NTU economist Choy Keen Meng also suspects that many recent hires in the service sector are lower-skilled foreign workers. This, therefore, has no impact on the resident unemployment rate.

Still, he does not see the rate rising further as economic conditions improve.

Earlier this month, Prime Minister Lee Hsien Loong warned unionists that the jobless rate could rise, as it tends to lag behind economic recovery.

Elaborating yesterday, National University of Singapore associate professor Shandre Thangavelu said past data shows there is a lag of at least two quarters before a strong recovery in job growth.

For the moment, such recovery is expected to be slow, as many of Singapore's export markets remain weak.

Yesterday's manpower figures were a foretaste of the slow growth to come.

Although total employment rose, the number was a shadow of the 55,700 jobs gained in the third quarter last year.

It was also much lower than the 21,300 jobs added in the fourth quarter last year.

Jobs created were mostly in services - which account for two-thirds of the three million jobs - and in construction.

Service sectors that traditionally rely on regional demand, such as transportation and financial services, are seeing a firmer recovery, noted Mr Dhirendra Shantilal of hiring firm Kelly Services.

The ministry said manufacturing shed workers for the fourth straight quarter. But this was much lower than in the first half of the year when it lost 38,000 jobs.

Madam Halimah said many firms were seeing a return of orders and were ramping up inventories after having cut back.

'The statistics released show growing confidence among companies and that is a good sign,' she said.

Dr Chua reckoned that net job creation will improve and exceed 25,000 in the last three months of the year, supported in part by the extension till next June of Jobs Credit - the wage subsidy scheme.

Ministry data also showed layoffs fell to 2,200 from 5,980 in the past quarter.

But Nominated MP Terry Lee said it was premature to cheer as global growth may slow and affect Singapore, which remains reliant on exports.

Still, workers were more optimistic, Madam Halimah said, adding: 'Now that things are looking up and companies are performing better, workers hope they will do the right thing and consider paying bonuses to recognise the sacrifices made to cut costs and remain viable.'

Additional reporting by Cassandra Chew

This article was first published in The Straits Times.