Wednesday, 12 October 2016

Government ready to act if Singapore goes into recession

Ministers also outline plans for job creation, help for workers to upskill, take on new jobs
By Olivia Ho, The Straits Times, 11 Oct 2016

Singapore is not expected to go into a recession, but should the economy turn negative, the Government stands ready to respond, Minister for Trade and Industry (Trade) Lim Hng Kiang told Parliament yesterday.

"Depending on the nature and severity of the downturn, the Government is prepared to consider introducing a range of contingency measures, which could include broad-based as well as sector-specific measures," he said, without giving details of specific steps.

The economy is expected to grow between 1 per cent and 2 per cent this year, but there is widespread concern on the ground over rising unemployment and a weak global economic outlook.

A total of 15 MPs had filed 16 questions about the weak economic indicators of recent months for yesterday's one-day sitting, and some asked what was being done to help workers and create new jobs amid challenging conditions.

Mr Lim pointed to some bright spots of growth in the economy, citing tourism, information and communications, education, health and social services.

Two other ministers, Minister for Trade and Industry (Industry) S. Iswaran and Manpower Minister Lim Swee Say, told the House that government agencies will help job seekers and workers pick up the right skills to take on new jobs that are being created in these and other growth sectors.

Mr Iswaran noted that the Economic Development Board expects investment commitments to create 20,000 to 22,000 jobs this year, compared with 16,800 last year and 18,600 in 2014, and ongoing efforts will help support the creation of sustainable jobs in both new and existing industries.

"Many of these jobs, and others in sectors like education and healthcare, are suitable not just for new entrants... but also for mature workers seeking a new career," he said.

Mr Lim Swee Say announced plans by his ministry to transform the National Jobs Bank that has helped local job seekers access more jobs. A new "online marketplace" will serve as a round-the- clock job fair, matching job seekers to openings. It will also help structure careers for the unemployed and workers in sunset industries.

The Manpower Ministry is also increasing the number of Professional Conversion Programmes, which help mid-career workers switch jobs, from 22 at the beginning of this year to more than 50 by year end.

Its minister urged businesses and workers to focus on productivity gains through innovation as "that is the most sustainable way for us to sustain our growth in the long term without becoming overly dependent on foreign manpower".

He also stressed the need to ensure that the current low growth of 1 per cent to 2 per cent is but a transition, not the new normal. "Our future norm should be 2 per cent to 3 per cent of quality growth."

Government does not expect 'outright recession' for Singapore
Economy still expected to grow, albeit at lower end of official 1% to 2% forecast, says Lim Hng Kiang
By Wong Siew Ying, The Straits Times, 11 Oct 2016

A recession is unlikely to set in, but the possibility that the Singapore economy could see some quarters of negative growth cannot be ruled out, Minister for Trade and Industry (Trade) Lim Hng Kiang told Parliament yesterday.

Mr Seah Kian Peng (Marine Parade GRC), citing the sombre outlook and weak economic indicators for the past several months, had asked if a recession was imminent and what measures the Government was contemplating.

Mr Lim replied: "Our baseline projection is not an outright recession, but we cannot rule out the possibility that the economy will experience some quarters of negative growth on a quarter-on-quarter basis."

He added that the economy is still expected to grow, albeit at the lower end of the Government's 1 per cent to 2 per cent forecast.

Growth has tapered from 4.7 per cent in 2013, to 3.3 per cent in 2014, to 2 per cent last year.

The Trade and Industry Ministry will release advance estimates of third-quarter growth on Friday and the updated growth forecast for this year next month.

Mr Lim also told the House the Government is ready to respond if an economic downturn takes hold.

He said: "Depending on the nature and severity of the downturn, the Government is prepared to consider introducing a range of contingency measures, which could include broad-based as well as sector-specific measures."

His remarks come amid concerns over rising unemployment, slower growth and a weak global economic outlook. The second half of the year is expected to see the economy grow at a slower pace than the 2.1 per cent in the first six months.

While Mr Lim did not elaborate on the potential contingency measures, he highlighted existing schemes that adversely affected firms can tap. These include the SME Working Capital Loan scheme - introduced as part of Budget 2016 - that helps small companies with cash-flow concerns and financing needs for growth. The Government has also deferred the marine sector's foreign worker levy increases for a year, amid challenging conditions faced by the sector.

Mr Lim said the global outlook is expected to remain weak in the near term owing to sluggish investment demand in advanced economies, slower growth in China, low oil prices and weaker global trade flows. Britain's vote to leave the European Union has dampened and added uncertainties to the outlook, he added.

Despite the slowdown in growth, Mr Lim highlighted some bright spots in the economy.

He said: "Tourism-related sectors such as accommodation have benefited from the recovery in tourist arrivals. Growth in 'other services industries' and the information and communications sector is also expected to remain resilient."

Mr Lim also emphasised the importance of pressing on with efforts to steer Singapore's economy towards a "more sustainable growth path driven by productivity and innovation". There is also a need to continue to transform the industries and create good jobs for citizens over the longer term, he added.

National Jobs Bank to become 'online marketplace' for jobs
National Jobs Bank to transform into an online marketplace for all career stages, with job guidance
By Olivia Ho, The Straits Times, 11 Oct 2016

The National Jobs Bank will evolve into an "online marketplace" for jobs, which will go beyond just displaying vacancies but act like a round-the-clock job fair.

Manpower Minister Lim Swee Say told Parliament yesterday that this new marketplace will point not just job seekers, but also vulnerable workers in industries under threat, in the direction of which careers to pursue. He was replying to questions from 11 MPs worried about rising resident unemployment and retrenchments, in the wake of a sobering Ministry of Manpower (MOM) report released last month.

"We will transform the National Jobs Bank into a one-stop and non-stop online marketplace," Mr Lim said. "Job seekers will be able to explore new career opportunities and conduct job searches any time, anywhere without having to wait for the next job fair."

The first iteration of this new marketplace took place last month, with a two-week virtual career fair that offered 500 vacancies from 51 employers in information and communications technology (ICT), biomedical sciences, professional services and aerospace.

Mr Lim did not say when the new marketplace will be launched, but said it will target job seekers across age groups, be they fresh graduates searching for their first jobs, mid-career workers seeking a switch, or mature workers looking to stay active.

The marketplace will help workers streamline their careers through the Skills Framework, which maps career ladders in various industries and pinpoints the skills and training workers need to get the jobs they want. Skills frameworks have already been launched for the hotel and early childhood care sectors last month, with more to come for other sectors.

Mr Lim also said MOM and its agencies have stepped up job-matching and career services.

In the first eight months of this year, Workforce Singapore and the Employment and Employability Institute helped 20,000 job seekers, with over 13,000 finding work in sectors like ICT and healthcare.

The number of successful job placements was 20 per cent higher than in the same period last year. Rank-and-file workers made up 55 per cent of these, while 45 per cent were professionals, managers, executives and technicians (PMETs).

To help PMETs, who make up seven in 10 of residents laid off last year, MOM is also increasing the number of Professional Conversion Programmes (PCPs), which help mid-career workers move to industries with the potential to grow. There were 22 PCPs at the beginning of this year, and Mr Lim said there will be more than 50 by year end.

Mr Patrick Tay (West Coast GRC) asked how the ministry can help older PMET job seekers. Mr Lim replied that MOM is working with more companies at their job fairs to take on mature workers. This could be either under a PCP or through the Career Support Programme, which gives wage subsidies to employers hiring PMETs who are aged 40 and above or have been unemployed for six months or more.

Mr Ang Hin Kee (Ang Mo Kio GRC) and Dr Tan Wu Meng (Jurong GRC) asked how the ministry can make the online marketplace more attractive to employers, especially those who are not proactive now or use competing job portals in the private sector.

Mr Lim said advertising in the marketplace will be compulsory for employers, before they open the vacancies to foreigners on Employment Passes. He hoped, however, it could also attract employers who mean to hire only locals.

"If we can make this marketplace a vibrant and comprehensive one, I think more and more employers will want to come on board because it will be easier for them to look for the right worker," he added.

Respite for firms as business costs fall
By Wong Siew Ying, The Straits Times, 11 Oct 2016

Business costs, especially utilities and rentals, have declined in the past year or so, likely providing some respite for companies.

Minister for Trade and Industry (Industry) S. Iswaran told Parliament yesterday that the cost of utilities is expected to remain subdued given sustained low oil prices.

He said regulated tariffs paid by households fell by 24 per cent from the beginning of last year to the second quarter of this year - a trend also observed in the corporate sector.

"There were similar trends for those in the industry, especially because they have greater flexibility in negotiating contracts."

He was responding to a question from Ms Lee Bee Wah (Nee Soon GRC) on whether the ministry has looked into how local price rises from labour, materials, transport and a stronger Singdollar affect overall business cost.

In his reply, Mr Iswaran said rents are down across various segments.

The industrial rental index was down by 6.8 per cent over the past five quarters, while office rents in the central region fell by 12.2 per cent, and central region retail rents slid 9.3 per cent in the same period.

"The strong pipeline supply of industrial and commercial space coming on-stream in 2016 should continue to ease rental cost pressures."

Labour costs, however, varied. The unit labour cost in the manufacturing sector fell by 0.7 per cent year on year in the second quarter due to productivity improvements but the unit labour cost in the service sector rose by 4.5 per cent.

Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) wanted to know how the Government is addressing the sharp fall in private investments and its impact on job creation.

The Economic Development Board (EDB) saw fixed asset investments dipping from $12.1 billion in 2013 to $11.5 billion last year.

Mr Iswaran said the decline in investment is due partly to uncertain global economic conditions.

It also reflects Singapore's targeted approach to attracting projects "consistent with our stage of economic development, manpower policies and international commitments on carbon emissions".

The Republic, he said, remains attractive to investors, citing chipmaker Micron and drug-maker AbbVie as companies that made investments here recently.

Mr Iswaran said wooing investments remains a key part of the Government's strategy to grow the economy, which will generate good job opportunities for Singaporeans.

The EDB expects investment commitments to create 20,000 to 22,000 jobs this year - up from 16,800 in 2015 and 18,600 in 2014.

Responding to a question from Mr Liang Eng Hwa (Holland-Bukit Timah GRC) on the number of failed companies, Mr Iswaran said more enterprises were formed than shut in the first two quarters of the year. Figures from the Accounting and Corporate Regulatory Authority showed that more than 33,600 were formed, compared with some 21,800 shut in the first half of this year.

Mr Iswaran said the Government seeks to help companies manage immediate challenges, but they must stay competitive in the mid- to long term by embracing new technologies and business models. "Successful economic transformation will require the collective effort of workers, unions, companies, industry associations and the Government."

Good jobs crucial amid low employment growth
By Joanna Seow, The Straits Times, 11 Oct 2016

Growth in the number of employed locals has slowed as a result of the economic cycle as well as a shift towards smaller cohorts of new workers and larger cohorts of retirees, said Manpower Minister Lim Swee Say yesterday.

This is why it is important to create good jobs that match the skill profiles of new workers, and ensure foreign manpower grows in a "balanced" way that complements local workers, Mr Lim told Parliament.

There is concern on the ground that local employment growth has been flat, at just 500 over the past 18 months. Average yearly growth was 73,000 from 2012 to 2014.

Mr Lim said economic conditions and policy factors can affect the number of people joining and leaving the workforce, such as more people leaving work after termination and completing contract and casual work, or for further studies and training. At the same time, more people are leaving jobs and fewer are entering them due to a structural shift in Singapore's labour force.

The number of residents retiring each year has nearly doubled from 2013 to 2015, rising from 11,000 to 20,000, according to Ministry of Manpower (MOM) data that Mr Lim showed. But the number of residents aged 15 to 24 joining the workforce fell in the same period, from 81,000 in 2013 to 69,000 last year.

"With ageing and lower birth rates, coupled with our relatively high labour force participation rate and low unemployment rate, we will see a continued slowdown of local labour force growth towards negligible levels or even stagnation in the next decade," he said.

Singapore should strive for a growth rate of 2 per cent to 3 per cent with good jobs, not the current 1 per cent to 2 per cent, he added. This is important as many new entrants to the workforce are not looking for the jobs vacated, he said.

Foreign manpower policy must also be well balanced. Neither taking in many more workers, nor reducing foreign manpower growth to zero, will be good for the economy.

In the first case, restructuring and productivity will be hit as companies become overly reliant on foreign manpower, he said, and in the second, no labour force growth coupled with low productivity growth will lead to a stagnant economy.

Asked by Mr Liang Eng Hwa (Holland-Bukit Timah GRC) and Ms Foo Mee Har (West Coast GRC) about Employment Passes, Mr Lim said the MOM is increasingly selective in approving work passes for foreigners, and considers companies' adoption of fair and progressive human resource practices.

There are about 250 companies now on MOM's watchlist for being "triple weak", that is, not being up to scratch in having and nurturing a strong Singaporean core, and not having strong relevance to Singapore's economy and society, he added, in reply to labour MP Patrick Tay (West Coast GRC).

They include 80 out of 100 companies first identified in February this year that did not improve. Another 180 were identified since then. Around 20 of the original companies responded well by taking part in job fairs and stepping up training for locals, Mr Lim added.

Singapore's job crunch: Layoffs and unemployment up in Q2 2016 - Manpower Ministry

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