LABOUR chief Lim Swee Say expects retrenchment this year to be higher than last year's, but still below the historical average.
Low-skilled manufacturing workers will bear the brunt of job losses.
These workers, typically categorised as plant and machine operators and assemblers, form almost 10 per cent of Singapore's workforce of 1.8 million.
Mr Lim, secretary-general of the National Trades Union Congress, gave his response yesterday when asked for his retrenchment projections following recent official figures showing a slowdown.
He said in an e-mail reply to The Straits Times: 'We expect the number to be higher than last year, but likely to be still below the average level of 10,000.'
On average, about 10,000 workers are laid off each year.
Retrenchments hit a high of almost 30,000 in 1998 during the Asian financial crisis. Last year, however, it dipped to a 10-year low of 7,675 following three years of strong growth and high job creation.
Latest official figures showed 4,174 workers were retrenched in the first half of the year. Most were in manufacturing.
The spectre of rising retrenchment was raised after the Government revised its growth forecast last week: from 4 to 6 per cent to a narrower 4 to 5 per cent.
The Ministry of Trade and Industry also said job losses were on the cards. It singled out export-dependent manufacturers, saying they would suffer a contraction in overseas sales this year, their first since the 2001 dot.com bust.
Later, Minister Mentor Lee Kuan Yew said layoffs were likely in industries exporting to the United States and Europe.
Mr Lim, who is also Minister in the Prime Minister's office, pointed to keen global competition as another factor contributing to retrenchment.
'Manufacturers keep moving to places that are either closer to their consumer markets or offer lower production costs,' he noted.
In his view, layoffs are inevitable and the solution is to retrain workers.
'We cannot try to slow down the pace of upgrading or resist continuous restructuring, as it will make us less competitive and lead to even more retrenchments.'
He said: 'The overall job market is still quite healthy. There are enough jobs for our workers and the key is to be adaptable.'
Economists are divided on how bad the layoff figures will be for the rest of the year.
Citigroup's Chua Hak Bin sees a tougher job market. 'Job growth is exceptionally volatile in an open economy like Singapore's and can turn sharply negative in a severe downturn.'
Standard Chartered Bank's Mr Alvin Liew is more sanguine, saying the slowdown may be a protracted one and its impact less severe than that of the Asian financial crisis.
'The impact will be more benign as we have many buffers. Our economy is more diverse and our workforce is better trained,' he said.
Still, he expects the unemployment rate to rise from 2.3 per cent to 2.5 per cent by year end. 'The real challenge will come in the first half of next year.'