The 14.7 percent drop was much worse than the average decline of 7.7 percent forecast by economists in a Bloomberg survey.
Last week, Singapore reported weak economic numbers that raised fears of a recession. Annual exports fell for an eighth straight month, while overall employment grew more slowly, cutbacks increased and job vacancies shrank for a fourth straight quarter.
Domestic exports of non-oil goods (NODX) fell 14.7 percent in May, according to data from Enterprise Singapore, a statutory body of Singapore’s Ministry of Trade and Industry. This happened after a 9.8 percent decline in April, which led to a decline in both electronics and non-electronics exports. The decline is mainly attributed to weaker markets in Hong Kong, Malaysia and Taiwan, although exports to China and the United States increased. NODX to Singapore’s top 10 markets fell overall last month.
The 14.7 percent drop was much worse than the average decline of 7.7 percent forecast by economists in a Bloomberg survey.
With Singapore’s economy contracting 0.4 percent quarter-on-quarter in the first quarter of this year and global consumption slowing amid a rapid rise in interest rates, the weak numbers raised the risk of a technical recession in Singapore’s export-oriented economy. .
A technical recession is defined as two consecutive quarters of contraction.
Maybank economist Chua Hak Bin told Reuters the export slump was deepening and showed “few signs of a reversal”, with the May data raising the possibility that Singapore may have slipped into a technical recession.
Separately, during the same week, Singapore’s Ministry of Manpower (MOM) released its labor market report for the first quarter of 2023, which suggested a cooling labor market as job vacancies fell to 99,600 from 126,000 in the same period a year ago. Layoffs were also faster, with 3,820 employees losing their jobs in the first quarter, compared to 2,990 in Q4 2022.
However, total employment in Singapore rose by 33,000 for the sixth consecutive quarter in the January-March period, driven mainly by non-residents including Indians. A total of 30,200 employees came from overseas mainly to work in the construction and manufacturing sectors. This number does not include migrant domestic workers who work in households.
With the additional recruitment of foreign workers in the 1st quarter, a significant milestone was crossed, as the number of non-resident employment surpassed the pre-pandemic level for the first time. It is now 1.7 percent higher than in 2019. Total employment in Singapore has surpassed the pre-pandemic level by 3.8 percent.
Another 2,800 new hires are Singaporean citizens and permanent residents hired by companies in financial services, professional services and health and social services.
Singapore has a significant Indian community that lives and works here.
As of June 2021, Singapore has a population of 5.45 million, according to the Singapore Department of Statistics. 4 million are citizens and permanent residents, of whom 7.5 percent or 300,000 are ethnic Indians.
1.45 million Singaporeans are considered non-residents, meaning they are either on various work passports or are students. Indian nationals account for about 350,000 or 24 percent of these non-residents in Singapore, based on data released by the Ministry of Foreign Affairs’ Consular Services.
The share of Indian professionals in Singapore doubled from 13 to 25 percent between 2005 and 2020, according to Singapore’s Human Resources Minister Tan See Leng in July 2021.
Indian talent is internationally transferable and tends to seek opportunities abroad. It is currently the largest country of origin of international migrants. In 2020, there were 18 million international migrants, 2 million more than in 2015, based on figures from the United Nations Department of Economic and Social Affairs.
The country has become the second largest source of immigrants to the US and the third largest to the UK, both investing heavily in building technological capacity.
Any contraction in Singapore’s labor market will affect the trend of Indians flocking to its shores in search of job opportunities.
Singapore’s Ministry of Human Resources said in April that “global economic headwinds have contributed to a slowdown in Singapore’s economy, which will weigh on future labor demand, particularly in outward-facing sectors. Employment growth is likely to moderate and be uneven across sectors.”
OCBC Bank chief economist Selena Ling told Singapore’s Straits Times that “the softening outlook for the labor market is unsurprising given the worsening external environment, including the United States’ regional banking woes, China’s faltering recovery and the continued global semiconductor slump”.
She added: “Recent business sentiment has also softened, reflected in the Manufacturing and Electronics Purchasing Managers’ Index (PMI) as well as our OCBC Small and Medium Enterprises Index. Hiring intentions and employment growth have started to moderate and may pick up in the coming months from to moderate growth.” momentum is likely to slow in the second half of 2023.”
“Interestingly, rising vacancy and cutbacks in some sectors such as ICT and financial services suggest that there is some ongoing attrition and/or pockets of opportunity in the sector.”
