THE robust economic performance led to another record-breaking year for new jobs created last year, bringing the jobless rate to a decade low, and boosting workers' earnings.
But productivity shrank during the year as the growth in output has not kept pace with the record increase in manpower.
Employment rose by a record 234,900 or 9.4 per cent in 2007, far surpassing the gains of 176,000 or 7.6 per cent in 2006, according to figures released by the Ministry of Manpower on Friday.
Local employment grew by 90,400 in 2007, compared with 90,900 a year go.
Some 144,500 jobs went to foreigners - a new high, compared to 85,100 in 2006, enabling the economy to grow beyond the limits of Singapore's indigenous workforce.
As at December, there were 900,800 foreigners forming one in three, or 33 per cent, of the 2.73 million persons employed in Singapore.
Supported by the robust job creation, the unemployment rate dropped to the lowest in a decade.
The seasonally adjusted overall and resident unemployment rates declined to 1.6 per cent and 2.3 per cent in December, from 2.6 per cent and 3.6 per cent respectively a year ago.
An estimated 45,200 residents were unemployed at the end of the year. The seasonally adjusted figure was 45,600. MOM said structural unemployment also fell amid the robust employment growth.
The resident long-term unemployment rate reached a 10-year low of 0.4 per cent in December, down from 0.8 per cent a year ago, as the number of residents who had been looking for work for 25 weeks or more fell to 8,900 from 15,100.
The share of long-term unemployed residents among the pool of resident job seekers eased to 20 per cent - from 22 per cent a year ago.
The number of workers retrenched in 2007 fell by 39 per cent from 12,603 in 2006 to a 14-year low of 7,675 in 20072.
Based on CPF records, two thirds of residents retrenched in the private sector secured re-employment within 6 months after retrenchment in 2007. This is the highest re-employment rate recorded since 1997, said MOM.
There were 37,400 job vacancies at end of last year, higher than 32,000 previously. These unfilled posts represented 2.5 per cent of manpower demand3, up from 2.3 per cent a year ago.
With the rise in job vacancies and low unemployment, the seasonally adjusted ratio of job vacancies to unemployed persons hit a decade-high with 138p job openings for every 100 job seekers in December, a sharp improvement from 79 the previous December.
Earnings up 6.2%
Nominal earnings also rose over the year by 6.2 per cent in 2007, up from 3.2 per cent in 2006, but lower than 8.9 per cent during the last economic boom in 2000. After accounting for inflation, the growth in real terms was 4 in 2007, 2.2 per cent in 2006 and 7.5 per cent in 2000.
Productivity down
For the whole year, productivity shrank by 0.9 per cent after experiencing slowing growth in the preceding two years. The last time productivity had contracted was during the economic downturn in 2001.
This time round, while there was healthy output growth, it failed to keep pace with the record increase in manpower. Following the contraction in productivity, the overall unit labour cost (ULC) rose for the third straight year.
The increase in ULC of 3.8 per cent in 2007 was higher than the 0.5 per cent in each of the preceding two years but less than 6.5 per cent during the economic downturn in 2001.
