SINGAPORE'S economy may have slowed considerably in the third quarter of this year, but the labour market stayed very tight.
The unemployment rate, already near the record low, dipped further, and job vacancies per job seeker rose for the first time this year, according to new government figures released on Friday.
And although fewer jobs were created compared to the previous quarter, the overall numbers stayed relatively strong, buoyed by sectors like construction.
"Labour demand remains healthy and exceeds available labour supply despite weak GDP (gross domestic product) growth," noted Bank of America Merrill Lynch economist Chua Hak Bin.
Home-Fix managing director Low Cheong Kee said many companies like his remain in need of workers because it has been hard to hire due to the tight foreign worker policy.
The economy shrank 5.9 per cent in the third quarter from the quarter before, with every sector contracting except business services, which was flat.
But this did not help cool the labour market much. Job creation remained robust, with 26,200 jobs added, slightly fewer than the 31,700 added last quarter. Construction helped pull the number up. It added 9,700 jobs, up from the figure in the same period last year, as the sector took on more public infrastructure projects.
The unemployment rate dipped to 1.9 per cent from 2 per cent the quarter before. The jobless rates for residents and Singapore citizens stayed at 2.8 per cent and 3 per cent respectively, both near their record lows for the decade.
But the tightness in the labour market was reflected most notably in the number of job openings per job seeker unexpectedly bucking a falling trend for most of the year. There were 125 openings for every 100 job seekers in September, up from 91 in June.
Economists said this could be due to a mismatch between job seekers and job openings. For instance, inflows of low-skilled foreign workers have been curbed, but it is hard to find Singaporeans to take their place, said Credit Suisse economist Michael Wan.
Firms could also be hoarding workers out of fear that it may be hard to rehire, said economists.
Looking ahead, experts said labour demand will continue to remain tight for the last quarter, but may slow next year.
"The year-end retail sales will still generate demand for workers in the retail sales, food and accommodation segments," said Dr Tan Khay Boon, a senior lecturer at SIM Global Education.
Such is the case for Zingrill, which owns restaurant brands such as Seoul Garden and Breeks. Head of operations-training Pamela Tan said the company has not felt the impact of slower growth, and is still hiring - not least for a new outlet it has opened.
In any case, it is usual for the labour market cycle to lag behind the economic cycle, said DBS economist Irvin Seah.
He and others agreed that the discrepancy between economic cooling and the hot labour market is likely to narrow next year.
In the meantime, however, labour market tightness will put pressure on firms to raise wages despite weak economic growth. This could keep inflation high.
Mr Seah said "prolonged higher-than-normal inflation the past few years" means that workers will continue to expect higher wages to compensate - which will in turn raise inflationary pressures.