Jobless rate in March hits 5-year high of 4.8%

Jobless rate in March hits 5-year high of 4.8%

By Sue-Ann Chia, Senior Political Correspondent

Job seekers waiting to sign up as bus captains at a fair last month. Layoffs outnumbered jobs created in the first quarter this year, leading to a net loss of 1,000 jobs. — ST FILE PHOTO

THE unemployment rate for Singaporeans and permanent residents hit a five-year high of 4.8 per cent last month, according to the latest Manpower Ministry figures, but this is still below the peak reached during the Sars crisis in 2003.

The jobless rate for locals rose to 6.2 per cent in September that year, as worldwide fear of the infectious respiratory disease affected trade, tourism and business, and led to mounting job losses.

This year’s jobless level is expected to worsen, with most analysts agreed that the recession has not bottomed out yet.

The current swine flu outbreak adds to uncertainties over the economy and job market.

The Manpower Ministry figures showed a rising trend in job losses over the past year. (See chart)

There were 12,600 redundancies in the first three months of the year, the highest quarterly figure in a decade, surpassing the quarterly peak of 8,890 in 2001 due to the dot.com bust and terrorist attacks in the United States.

Most losses - 9,000 - were from the beleaguered manufacturing sector. Another 2,900 came from the services sector, and 700 from construction.

The redundancy numbers are in line with what analysts have predicted.

Barclays economist Leong Wai Ho, for instance, said he had predicted that 12,000 people would lose their jobs in the first quarter.

He said this was a relatively low figure despite the severity of the slowdown because of government measures like the Jobs Credit scheme which subsidises the wage bill for local workers, and the Skills Programme for Upgrading and Resilience (Spur) which encourages employers to retrain workers.

MOM figures showed that overall unemployment here rose from 2.5 per cent last December to 3.2 per cent last month, with 95,600 people out of work.

The unemployment rate which excludes foreigners, however, spiked much more, jumping from 3.6 per cent to 4.8 per cent over the same period.

Economists expect the unemployment rate to rise further in the coming months.

‘Government schemes have helped in the first few months but we should expect the next wave of job losses,’ said Standard Chartered Bank economist Alvin Liew.

As it is, jobs shed have already exceeded new job creation, with a net loss of 1,000 jobs in the first quarter this year.

The drop is due to falling external demand that has severely affected the manufacturing sector, which shed 19,900 jobs in the last quarter, far more than the 7,000 lost in the previous quarter.

The construction and services sector continued to add jobs, but at much lower numbers.

The services sector brought in 10,300 jobs, lower than 17,300 in the previous quarter; while the construction sector gained 8,500 jobs, down from 10,700 in the last quarter.

The first quarter’s job loss of 1,000 ends the job creation bull run that reached record highs in the last two years.

It is also the first decline since the Sars crisis of 2003. Economists from the Nanyang Technological University recently projected a net job loss of 70,000 for the entire year. That projection was made in March, before the swine flu outbreak.

Source : Straits Times - 30 April 2009

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Expect false starts and slow recovery

Expect false starts and slow recovery

Flu crisis and sub-par growth worldwide add to economic risk: MAS

By Fiona Chan

THE most intense phase of Singapore’s recession may be over, but the economy is not going to bounce back to full health any time soon.
Instead, the recovery will be ’slow, gradual and fraught with uncertainties’, unlike the quicker rebounds that followed previous downturns, said the Monetary Authority of Singapore (MAS) yesterday.

The central bank said in its latest Macroeconomic Review, a twice-yearly survey of the economy, that the worst economic contractions probably took place in the last quarter of last year and the first quarter of this year. The economy logged record quarter-on-quarter declines in both quarters, of 16.4 per cent and 19.7 per cent respectively.

But the MAS stopped short of saying that the worst is over or that the recession has bottomed out. Private-sector economists say that although the worst is likely behind us, the economy could continue to contract in the months ahead, although the declines will not be as severe.

The MAS warned yesterday that despite recent signs of a slight increase in economic activity around the world, the major economies are still ‘mired in an extended period of sub-par growth’ and Singapore’s growth is likely to remain ‘below potential’ as long as that lasts.

The new scare over swine flu, which has eerie echoes of the economically painful Sars period, has also added ‘a new dimension of risk to the outlook’, it said.

Job losses are expected to rise further across most sectors as companies adjust to the new lower levels of demand. The MAS expects that by the end of the year, net unemployment excluding construction will likely surpass that recorded in the 1998 Asian financial crisis and the 2001 global tech bust. Compared to those recessions, the current downturn is the deepest and one of the longest, and stands out in being more broad-based than previous contractions, it said.

It added that while some green shoots have emerged in the form of new manufacturing orders and stock market rallies, these could turn out to be ‘false starts’.

The purchasing managers’ indexes in Singapore and around the world have indicated that manufacturing will pick up slightly, but this could simply be due to inventory restocking rather than a return of true demand, said the MAS.

Any rises in Singapore’s stock market are also more likely to be ‘bear rallies’ rather than sustained recoveries.

Singapore, with its high dependence on external markets, is among the nations worst hit by the global downturn, with the economy expected to contract by between 6 per cent and 9 per cent this year. But the same openness will ‘enable it to pick up strongly when the global recovery finally gets under way’, said the MAS.

Citigroup economist Kit Wei Zheng said yesterday that the MAS’ comments on the economy held ‘no big surprises’.

‘One of the things that came out quite clearly is that the recovery is going to be very slow and the economy will be going through a period of sub-par growth spanning a wide range of industries,’ he said.

‘The bottom line is: the worst of the labour market may not be over yet and we could see more unemployment pain in the months to come.’

But Credit Suisse economist Joseph Tan noted that there are some ’surprise factors’ that could change the outlook for the economy. The main one is China, which is proving surprisingly resilient in its manufacturing, investment and retail sales numbers, he said. That could potentially help economies in the region do better than expected.

Source : Straits Times - 30 April 2009

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Singapore geared up to fight swine flu

Singapore geared up to fight swine flu

Health Minister Khaw urges everyone to be socially responsible

By Bertha Henson, Associate Editor

A long queue forming at National University Hospital as tighter screening measures, such as temperature checks and restricted visitor access, were taken yesterday. — ST PHOTO: YEO SAM JO

WHEN Sars struck without warning in 2003, Singapore was caught flat-footed like the rest of the world.
This time round, the country is going into war better prepared to deal with the enemy.

It will not be a short battle, but a long war of attrition against swine flu, which can invade the country undetected.

Images of battle were thrown up yesterday at the Government’s first press conference on a novel flu strain that appears to have originated in Mexico.

Said Health Minister Khaw Boon Wan: ‘This is a new war now, and we have to adapt our approach to face this new enemy.’

The new enemy, he added, was more dangerous than the Sars virus which cost 33 people their lives here.

While Sars victims show symptoms and are infectious only two weeks after contracting the virus, the swine flu H1N1 virus attacks silently.

One in three victims does not even show any flu symptoms, such as sneezing or a high temperature. Some might already pass on the virus before their first sneeze. This flu is most contagious 24 hours before any signs surface.

What it means is that some Sars processes, such as putting patients in quarantine and tracing everyone they had contact with, will not be as effective with swine flu.

Temperature checks at border checkpoints may also not pick out all imported cases, as some infected people may appear healthy.

Mr Khaw said it is only a matter of time before someone with swine flu enters Singapore, and the country must be prepared.

‘And I think we should not be unduly shocked if it happens, because it may very well happen,’ he said.

‘For all we know, even as we speak, there may already be such patients in the community.’

There is another key difference now.

With Sars, there was a quick fight and it was over. But flu epidemics tend to come in waves. The first might be over in two months, but there is no telling when or how severe the next will be.

With Mr Khaw at the press conference was Deputy Prime Minister Wong Kan Seng, who chairs a standing ministerial committee to respond to crises on the homefront.

He said the virus will have to be treated on both the medical and non-medical fronts, with travellers and everyone here playing a big role.

For ordinary people, it is all about having a sense of social responsibility: Go to the doctor if you have flu symptoms, stay at home if you are sick, take care when you cough or sneeze, and wash your hands.

Personal hygiene is critical because the virus is discharged through saliva, nasal secretions and faeces.

Mr Khaw suggested that those who return from Mexico and places in the United States hit by swine flu - New York, California and Texas among them - stay at home for a week if they can in case symptoms show up.

Mr Wong said that thanks to the lessons from Sars, Singapore has been able to respond swiftly now.

Hospitals are now in ‘yellow’ mode - on a five-level alert system that goes from green to yellow, orange, red and black.

Visitors are being screened for fever, and there is restricted access to patients in the wards.

Worldwide, jitters over swine flu have spread.

The death toll in Mexico has risen to 159. The first death outside Mexico occurred in Texas, where a 23-month-old Mexican child died.

In Singapore, 17 people have been referred to the Communicable Disease Centre because of their symptoms and travel history and so far, 14 have been cleared. Three others are still undergoing tests.

Source : Straits Times - 30 April 2009

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Will DC complicate the green push ?

Will DC complicate the green push ?

Reverting to the 50% formula might be timely

By KALPANA RASHIWALA

NEW incentives rolled out this week to support the greening of Singapore’s buildings have once again put the spotlight on the formula for calculating development charges (DC).

For instance, the Building and Construction Authority and Urban Redevelopment Authority will offer bonus Gross Floor Area (GFA) of up to one per cent of total GFA capped at 2,500 square metres to developers that construct new buildings which attain Green Mark Gold Plus rating.

For new projects that achieve the top Platinum rating, a higher bonus GFA of up to 2 per cent capped at 5,000 sq m will be granted as incentive.

The bonus GFA is not free; DC is payable.

URA has also announced a new incentive to promote skyrise greenery. It will allow additional GFA for existing buildings within key activity corridors in the Orchard and Downtown Core planning areas.

The additional space can be used for outdoor refreshment areas on the rooftop level if owners provide rooftop landscaping for their developments. Again, DC is payable for this bonus GFA.

Unfortunately the way DC has been calculated since a formula change in July 2007 could diminish the attactiveness of these incentives. The current DC formula creams off 70 per cent of the appreciation in land value that arises from changing the use of a site or putting more GFA on it.

The previous DC formula, which was effective between 1985 and July 2007, creamed off 50 per cent of the enhancement in land value. A point to note is that prior to 1985, DC rates had also been based on the 70 per cent formula, until they were adjusted to 50 per cent during the 1985 recession.

With Singapore in the throes of a slump currently, many property industry players have called on the government to reinstate the 50 per cent formula.

After all, in 1985, the authorities deemed it fit to cut the DC rate to 50 per cent because of the recession and the same should apply now as Singapore is going through its worst recession.

Another reason to argue for a restoration of the 50 per cent DC formula is that sharing the appreciation in land value equally between government and private land owner - instead of developers being forced to surrender 70 per cent of the enhancement to the state - would be a fairer policy. Developers have to be given sufficient incentive to bear the risk of development.

Now, there’s an extra reason why it would be timely for the government to reinstate the previous DC formula: to spur developers to attain higher Green Mark ratings for their buildings and promote skyrise greenery on the island. According to BCA data, it costs 2-8 per cent more to develop a building to attain the top Platinum standard and the payback period for this is between two and eight years.

For developments built to the second-highest Green Mark standard of Gold Plus, the green cost premium is 1-3 per cent and the payback period is 2-6 years.

Having to pay a lower DC rate on the bonus GFA would lessen the cost burden to developers keen on building new projects that attain the top two Green Mark ratings.

Some observers have suggested that even if the government refuses to restore the old 50 per cent DC formula, it should at least consider using this formula for computing DC for the bonus GFA under the new schemes announced this week.

But having different DC rates for different purposes may complicate things. Retaining the current uniform DC rate would be desirable but a reversion to the old 50 per cent formula would be a timely move for the government to give developers more bang for their buck to invest in green buildings.

It will also allow the government to get maximum effect from its newly minted schemes to promote Sustainable Development in Singapore.

Source : Business Times - 30 April 2009

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Rooftop landscaping gets $8m boost

Rooftop landscaping gets $8m boost

NParks launches 3-year co-funding scheme; URA starts landscaping for urban spaces plan
By EMILYN YAP
(SINGAPORE) Hot on the heels of a sustainable development blueprint released on Monday, the National Parks Board (NParks) yesterday announced a three-year $8 million scheme to co-fund rooftop landscaping in the city.
 
Lush living: Artist’s impression of Marina Bay Station Square; MrSteed envisions it will ultimately be possible for all roofs to have green features 
The Urban Redevelopment Authority (URA) also launched its landscaping for urban spaces and high-rises (Lush) programme to help meet the blueprint’s goal of creating another 50 hectares of ’sky-rise’ greenery by 2030.

‘Despite Singapore being land scarce, greenery can be pervasive in our urban spaces,’ said URA chief executive Cheong Koon Hean. From September this year, NParks will give cash incentives to owners who install green roofs on existing buildings in the downtown and Orchard planning areas. The scheme will first target low- to mid-rise developments that are highly visible, and those surrounded by little street-level greenery.

NParks hopes to create nine hectares of green roofs over the next three years. The incentives will cover up to half of installation costs, capped at $75 per sq m. According to the agency, the typical cost of installing a green roof ranges from $150-$180 per sq m.

Gardens on the roof cost more than those on the ground for every square metre, said Singapore Institute of Landscape Architects’ president Henry Steed. ‘But once you have built it, the asset is there and the land usable, whereas a plain roof is not.’

In conjunction with NParks’ scheme, URA will offer owners who install green roofs bonus gross floor area (GFA) above the master plan permissible intensity. The additional space - limited to half of the roof area or 200 sq m, whichever is lower - can be used for outdoor refreshment areas.

Developers will have to pay a development charge (DC) or differential premium, but URA believes the bonus GFA offer is sufficiently attractive.

The current DC calculation formula creams off 70 per cent of the enhancement in land value, but ‘there’s still a 30 per cent gain for developers,’ said URA’s urban design deputy director Cheng Hsing Yao.

The GFA incentive scheme is part of URA’s Lush programme, which includes other existing and revised measures to enhance the urban landscape.

For instance, developers applying to exclude sky terraces from GFA computations now have to submit detailed plans on landscaping and communal facilities at the terraces.

Developers housing car parks within raised decks must also put up earth berms for plants on at least 60 per cent of each side of the deck wall, and should surround the area with see-through fences rather than solid walls.

In the strategic areas of the Downtown Core, including Marina Bay, Kallang Riverside and Jurong Gateway, new developments also have to put in place ’sky-rise’ greenery or ground-level landscaping equivalent to the site area in size.

For very small plots where buildings have to be tall to maximise the plot ratio, ‘replacement is typically not too difficult,’ said Singapore Institute of Architects immediate past-president Tai Lee Siang.

Both Mr Steed and Mr Tai believe more can be done to promote urban greenery.

Mr Steed, for instance, envisions it will ultimately be possible for all roofs to have green features ranging from gardens, water catchment areas and even mini-farms.

Source : Business Times - 30 April 2009

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MAS sees a long, painful trek ahead

MAS sees a long, painful trek ahead

Swine flu adds new twist as S’pore prepares for extended period of sub-trend growth
By ANNA TEO

(SINGAPORE) The worst is probably over for Singapore in the downturn, but recovery - when it comes - will be prolonged and painful, with many sectors in for an extended period of sub-trend growth, says the Monetary Authority of Singapore (MAS).

Plus, the swine flu outbreak has added a new spin to an outlook already fraught with uncertainties, it notes in its latest biannual macroeconomic review published yesterday.

With almost 60 per cent of Singapore’s exports headed for economies ‘expected to be in outright recession in 2009′, GDP here fell sharply in the last two quarters.

‘Barring further significant external shocks, the most intense phase of this downturn for Singapore may have already occurred,’ MAS says, adding though that a decisive rebound is not expected this year.

Instead, the climb out of recession will likely be slow, gradual and possibly ‘marked by several false starts’, as weak global demand and structural strains continue to weigh on the domestic sectors.

With the economy having lost almost 12 per cent in Q1 from its year-ago peak, the official projection of 6-9 per cent GDP contraction for 2009 means that the quarterly sequential expansion for the remaining three quarters of the year would be significantly less than the 9.5 per cent average (seasonally adjusted and annualised) in previous recessions, the MAS review says.

Indeed, in all three previous downturns - in 1985, 1998 and 2001 - the Singapore economy rebounded from the trough and returned to its previous peak within three quarters, the report notes. ‘In this downturn, however, it will probably take longer to return to its previous peak.’

MAS expects the job market will likely weaken further, ‘although prospects vary across industries’, and reckons that net employment (excluding construction) by Q4 2009 could shrink by more than the net job loss recorded during the 1998 Asian financial crisis and the 2001 global IT downturn.

The manufacturing, financial and trade-related industries, in particular, may see severe job losses. Nominal wage increases will also likely be ‘relatively muted’ this year, compared with the 5.4 per cent rise seen in 2008.

The central bank maintains, however, that there is ‘little likelihood at this point in time of a persistent, broad-based and self- sustaining drop in consumer prices’ - or debilitating deflation - even with the inflation rate expected to fall to zero, or possibly minus one per cent, this year.

On the newly-developing swine flu epidemic, MAS says it is not certain at this stage how the outbreak will impact global economic prospects, and the situation bears close watching. There could be repercussions for the domestic economy, notably the transport and travel-related industries, initially through the immediate and direct transmission channels.

The confluence of adverse factors depressing global growth will likely persist into the next few quarters, MAS says. ‘Global demand is unlikely to rebound strongly, with the major economies mired in an extended period of sub-par growth. The stresses in the global financial system are expected to weigh on economic activity for some time.’

A vastly open economy like Singapore’s would be particularly susceptible to the global headwinds, especially as external demand has grown ‘markedly’ over the last decade as a source of growth.

But the extreme openness of the Singapore economy should also enable it to pick up more strongly than other countries when the global recovery eventually gets underway, MAS says.

Source : Business Times - 30 April 2009

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