S'pore expected to feel bite of U.S. economic slowdown

S'pore expected to feel bite of U.S. economic slowdown

SINGAPORE (AFP): Unemployment in Singapore is forecast to rise sharply this year as retrenchments increase and job vacancies fall due to the impact of the U.S. economic slowdown, the government said on Wednesday.

An improvement in the unemployment rate to 2.4 percent in the March quarter from 2.9 percent the previous quarter is expected to be shortlived as new graduates flood the market this June, the ministry of manpower said in a report.

"The slowing economy has started to affect the Singapore labor market. Nearly all indicators point to slackening in the labor market," the ministry said.

"The entry of this year's cohort of tertiary graduates and the expected weakening in labor demand is likely to aggravate the labor market conditions in the months ahead," it added.

It cited a survey of business expectations by the statistics department and the economic development board which warned of further deterioration in business conditions for the key manufacturing sector.

This suggested "dismal employment prospects ahead," the ministry said.

Companies in the electronics and precision engineering sectors which were badly hit by the global downswing expect to further cut staff in the second half, it said.

"Overall manpower demand will falter if economic conditions continue to soften and the weakness spills over to services," the ministry said, noting a 20 percent drop in media advertising in April from the previous month.

In the three months to March, 3,248 workers were retrenched -- higher than the average 1,900 registered in the last three quarters of 2000.

This reflected the weakness in global demand for electronics products and the faltering U.S. economy -- a major market for Asian exports, the ministry said.

But the retrenchments are still lower than the 7,000 to 8,000 workers laid off per quarter during the Asian financial crisis in 1998, the ministry said.

Job vacancies fell to 19,755 in March from 22,115 in January, with the ratio falling to 0.76 job openings for every 100 job seekers in March, from a high of 1.14 in September 2000.

Economists project Singapore's economic growth this year to be at the bottom end of the government's 3.5-5.5 percent forecast, from a sizzling 9.9 percent last year.