In its review of the macroeconomic situation released on 28 October, MAS said the unemployment rate of Singaporeans and permanent residents is expected to decrease gradually next year after peaking in the second half of 2020, but will remain elevated overall.
These projections for the labour market are despite employment prospects looking up in the immediate term in the retail and food and beverage (F&B) sectors, and in support services such as cleaning and security industries.
These business areas rebounded quickly with Singapore exiting the circuit breaker in June, said MAS. Further, it added, this will weigh on wages for the rest of this year and possibly into 2021. As for the travel-related sector, MAS said some modest employment recovery can be expected with the easing of safe distancing measures and, in particular, the resumption of meetings, incentives, conventions and exhibitions (Mice) events and some cruise operations.
However, longer term recovery will be protracted, as activity in the travel-related sector is expected to be weak for an extended period of time, leading to spillovers to the rest of the economy which will weigh on the overall labour market. These include land transport operators such as taxi and private hire car services, which have likely seen a sizeable shortfall in income due to the lack of inbound leisure and business travellers. The uncertain macroeconomic outlook will also hold back overall labour market prospects, as activity in many sectors could be weaker than expected with further balance sheet strains, said MAS.
Residents who were previously discouraged from seeking employment could re-enter the labour force as the economy recovers, and individuals under the SGUnited training programmes could add to the number of unemployed workers when looking for jobs.