Singapore's unemployment rate climbs as companies slowed hiring

Singapore’s unemployment rate rose last quarter after companies in the city state hired fewer workers as the economy slowed and the global recovery weakened.

The seasonally adjusted unemployment rate rose to 2.1% in the three months through June from 1.9% the previous quarter, the Ministry of Manpower said in a statement today. That’s higher than the median estimate of six economists surveyed by Bloomberg News for a rate of 2%. The economy added an estimated 22,800 jobs last quarter, compared with 28,300 in the first three months of 2011, it said.

Singapore, ranked by the World Bank as the easiest place to do business, has cut taxes in recent years to encourage investment in the island nation, prompting companies to hire hundreds of thousands of foreigners to fill positions. In elections held in May, opposition parties tapped on the rising discontent over the influx of overseas workers, which citizens say means stiffer competition for jobs.

 

“The supply of foreign worker inflows has tightened, with the growth rate of permanent residents and non-residents over the past year already visibly slowed down,” Kit Wei Zheng, a Singapore-based economist at Citigroup Inc., said before the report. “Political considerations could mean raising labor supply -- even in times of cyclical tightness -- may be increasingly difficult going forward and the impact will likely only be felt much later.”

 

The services industry added 18,800 jobs last quarter, while manufacturing companies increased payrolls by 1,300, the report showed, citing preliminary data. Construction employment rose by 2,600 in the three months through June, the government said.

 

More than a third of Singapore’s 5.1 million population is made up of foreigners and permanent residents. Companies added about 116,000 jobs last year when the economy grew a record 14.5%, and 59,700 of the new positions created went to foreigners, according to the Ministry of Manpower.