SINGAPORE - Singapore's jobless rate hit a six-year high in the fourth quarter, while total employment in 2016 grew at the weakest pace in over a decade, as labour market conditions softened amid a slowdown in economic growth.
The total unemployment rate rose to 2.2 per cent in the fourth quarter from 2.1 per cent in the third quarter, rising to a level last seen in the fourth quarter of 2010, preliminary data from the Ministry of Manpower showed.
While the rise in the unemployment rate is milder than what was recorded during economic recessions in the past, it raises concerns on the economy's outlook, analysts said.
"Consumption growth will slow further, which will impact things like retail sales, discretionary spending," said Credit Suisse economist Michael Wan.
For the whole of 2016, total employment was estimated to have increased by 16,400 or 0.4 per cent, the weakest growth since 2003 when total employment shrank by 0.6 per cent. "The moderation in total employment in 2016 took place amid slower growth in the Singapore economy, slowdown in local labour force growth and continued tightening of the supply of foreign workforce," the ministry said.
Many economists see the risk of Singapore's economy slowing further this year, after growth slipped to a seven-year low of 1.8 per cent in 2016.
Last year, employment in the manufacturing sector fell by 15,700, while construction sector jobs shrank by 11,300. Services employment grew by 43,800, down from a growth of 45,500 in 2015, the ministry data showed.
Job redundancies for the whole of 2016 rose to 19,000, the highest number of redundancies since 23,430 in 2009.
"Today's dismal labour print...reinforce our view that domestic cost pressures will be muted owing to a subdued labour market which will put a lid on wage growth", said Weiwen Ng, an economist for ANZ.