An estimated 96,400 (non-seasonally adjusted) residents were unemployed in December 2003. About one in every five (23% or 22,000) of them had been looking for job for at least six months. This was a decline from 27% (or 23,900) long-term unemployed residents a year ago.

With improving business sentiments, retrenchments dropped in the fourth quarter to 2,784, about two thirds the number laid off in the third quarter. This brought retrenchments for the whole of 2003 to 16,400 workers, down 14% from the year before. In 2003, the services sector (49% of total retrenchments) has for the first time since 1990, overtaken manufacturing (45% of total retrenchments) in terms of number of workers they lay off.

For the second consecutive year, professionals, managers, executives & technicians (PMET) (16.7 retrenched per 1000 employed) overtook production & related workers (15.8 per 1000) to post the highest incidence of retrenchment. The PMETs accounted for the largest group (40%) of locals retrenched in 2003 compared with production & related (34%) and clerical, sales & services (26%) workers.

Despite the improvement in economic conditions, the re-employment of retrenched workers has declined in December. Based on CPF records, 60% of the locals retrenched in the third quarter 2003 found re-employment by December 2003 (within 6 months after retrenchment), down from 68% experienced by the previous cohort in September 2003. The decline could have occurred on the back of improving sentiments, as job seekers defer their job search until after the festivities. Younger workers aged below 30 were the most re-employable with 74% finding a new job within 6 months, in contrast to just half (50%) of older workers aged 50 & over. By qualifications, the degree holders (53%) and the lower educated without secondary qualifications (54%) faced greater difficulty securing re-employment than the rest (more than 60%).

There were 13,070 private sector job openings1 in December 2003, up 1.2% from a year ago. With the improvement in unemployment, the ratio of job vacancies to unemployed persons rose to 30 job openings for every 100 job seekers (seasonally adjusted), from the trough of 18 per 100 in September 2003.

Although the first half of 2003 proved difficult, indicators for the second half show an improving labour market. Given the expectation that the economy will perform better this year, the recovery in the job market on the whole is likely to be sustained, even though there may be quarterly fluctuations. It is important that wage pressures do not undermine cost competitiveness, bearing in mind that restructuring and pressures to outsource jobs to lower cost countries will continue to pose challenges to creation of jobs locally.