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Foreign workers trickle out of Singapore, with job outlook to remain cautious: MAS
Singapore's reliance on foreign labor may be shifting, with the city-state's central bank pointing on Thursday to a cautious employment outlook.
In its macroeconomic review, conducted twice yearly, the Monetary Authority of Singapore said it expected net employment growth was expected to stay "modest and uneven across sectors."
That comes as the MAS forecast Singapore's economy would grow by 1-3 percent this year, not much off the 2 percent growth in 2016, boosted by the IT-related segments, amid new mobile-phone product launches and increasing use of semiconductors.
It noted that in the second half of last year, resident net employment rose by around 11,400, but foreign headcount declined by around 11,700, leaving overall unemployment largely unchanged.
Still, around 31,000 permanent residencies were granted in 2016, according to a March speech by Josephine Teo, senior minister of state for the Prime Minister's Office. Permanent residents would be considered residents, not foreign workers.
Most of the job losses were low-skilled work permit holders, the MAS said, noting the job losses were concentrated in the manufacturing and construction sectors, which had been restructuring.
Overall foreign employment contracted by 2,500, excluding foreign domestic workers, the first contraction since 2009, during the global financial crisis, the MAS said.
"At the same time, an increase in net entrants to the local labour force in the last quarter contributed to a slightly higher resident unemployment rate," it said.
The MAS noted that in the fourth quarter of last year the unemployment rate rose by 0.2 percentage point to 3.1 percent.
Bringing foreign workers into Singapore can be contentious politically.
After the 2011 election, in which the ruling party saw its margin of victory slip, the government responded to public opposition to the country's liberal immigration policies by making it more difficult for companies to bring in foreign workers. Measures included raising minimum salaries to make it more attractive to hire locally as well as pushing for greater skill training for foreign workers and changing the allowable foreign-to-local ratios in some industries.
The central bank expected employment growth would remain modest and uneven.
"It is likely to be stronger in the community, social and personal segment, supported by manpower requirements in education and healthcare, but weaker in sectors such as manufacturing and construction," the MAS said.
"The soft labor market will also cap underlying wage pressures in the economy."
At the same time, some occupations, such as nurses, physicians and restaurant managers, were seeing vacancies, sometimes for longer than six months.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1
