Singapore Q1 jobless rate jumps unexpectedly

May 1, 2007
Singapore Democrats

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Reuters
30 Apr 07
http://asia.news.yahoo.com/070430/3/313e9.html

Singapore’s unemployment rate rose unexpectedly in the first quarter to the highest level in more than a year as more people entered the job market, preliminary government data showed on Monday.

Analysts said that the increase in the jobless rate, to a seasonally adjusted 2.9 percent, was not a big concern because Singapore’s economy is still adding plenty of new jobs.

Overall employment rose by a 48,000 in the January-March quarter, with all major sectors adding workers, the preliminary report from the Ministry of Manpower showed. Last year, the city-state created a record 176,000 new jobs.

“It’s hard to complain about the growth in employment,” said David Cohen, an economist at Action Economics. “The growth in jobs is pretty much in line with last year’s strong pace.”

Singapore’s first-quarter unemployment rate was well above the 2.5 percent forecast in a Reuters poll of nine economists and was the highest rate since the third quarter of 2005.

The unemployment rate of 2.7 percent for the whole of 2006 was the lowest in eight years, with a fourth-quarter rate of 2.6 percent.

The Singapore dollar was marginally weaker after the data at 1.5194/04 to the US dollar.

Economists said a strong domestic economy would help create more jobs and keep the unemployment rate in check in the next few quarters.

“I expect more jobs to come onstream in the coming quarters, especially in construction, transport engineering, banking and services,” said Leslie Khoo, an economist at Forecast Ltd. “The still-firm economic growth should provide enough vacancies.”

The services sector, which accounts for about 70 percent of all jobs in Singapore, created the bulk of the new jobs in the first quarter. Manufacturing makes up 20 percent of all jobs in Singapore while the construction sector accounts for 10 percent.

Economists expect a string of new projects, including two giant casinos and a new waterfront financial district, to create more jobs in the construction sector.

Singapore’s trade-driven economy grew at an annualised rate of 7.2 percent in the first quarter, slowing from the 7.9 percent pace of the fourth quarter, advance data showed.

The government expects the economy to grow between 4.5 to 6.5 percent this year, slowing from the 7.9 percent expansion in 2006 as exports to the United States slow.

Singapore reports unemployment on a quarterly basis.