Singapore's economy continued to worsen as the new year approaches. Everything from shipping to air traffic is slowing down, wage cuts are being planned, and layoffs are expected to increase significantly.
Singapore to convene wage council, may cut pensions
Singapore will convene its National Wages Council (NWC) in early January, four months ahead of schedule, in what economists say may be a prelude to a cut in employers' pension contributions.
"Given the weakening economic situation, there is a need for the NWC to take stock of the new situation and review its May guidelines to help companies and workers manage the downturn," the Manpower Ministry said in a statement on Tuesday.
The ministry did not immediately respond to questions about the detailed agenda for the NWC's January meeting.
"At the last crisis, they cut the CPF (Central Provident Fund) and I won't be surprised if they did it again," said Joseph Tan, Singapore-based Asia chief economist for private banking at Credit Suisse.
"Between cutting wages and letting people go, the government's preference is to keep jobs."
The government last cut employers' contributions to the CPF, the retirement fund for Singaporean workers, by 3 percentage points to 13 percent in October 2003 to help firms cope with the effects of the SARS outbreak.
The NWC, which comprises representatives from government, employers and unions, usually meets in May to come out with wage guidelines for the following 12 months.
The cuts were partially restored last year and the employers' contribution rate currently stands at 14.5 percent on the first S$4,500 ($3,049) of an employee's monthly salary.
Singapore fell into a recession in the third quarter and the government has warned that the economy may shrink by one percent next year.
Singapore's labour market shows signs of softening: govt
Singapore's labour market has showed signs of softening as a result of the global economic downturn, according to the republic's Manpower Ministry.
It said Monday that total employment grew by 55,700 in the third quarter but lower than the growth in the second quarter which was 71,400.
The figure was even lower than that recorded a year ago which was 58,600. Overall unemployment rate remained at a seasonally adjusted 2.2 per cent in September 2008, unchanged from June 2008.
Singapore reports fall in shipping traffic
Singapore, the world’s biggest container port, suffered last month its first fall in throughput traffic since 2001 due to a slowdown in global exports that has affected the Asian shipping industry.
Container traffic shrunk by 1.5 per cent in November from a year ago to 2.29m twenty-foot equivalent units (TEUs), the standard industry measurement, Singapore’s Maritime and Port Authority said. Monthly traffic volume has been slowing since July, although total shipments have increased by 9 per cent to 27.8m TEUs through November from a year ago.
PSA, Singapore’s biggest port operator, reported separately that container traffic expanded by 8.8 per cent during the first 11 months of this year, including an 8.9 per cent rise in November from October. The downturn appeared to be most severe at Jurong Port, the country’s secondary port operator, although it did not provide data for November.
A slowdown in the city-state’s container traffic had been expected after Neptune Orient Lines, the Singapore state-owned shipping operator, recently announced that it was cutting capacity by up to 25 per cent on its routes to Europe and North America.
Shipping rates for the Asia-Europe route also have fallen sharply by as much as 90 per cent due to the contraction in global trade.
Singapore's Keppel to scrap 140 mln euro contract
Singapore's Keppel Corp said on Tuesday it has decided to terminate a project to build a floating heavy lifter worth 140 million euros.
The Singapore firm said it had ceased work on the lifter after MPU Offshore Lift ASA, the firm that contracted the project, filed for bankruptcy in July 2008.