Singapore’s unemployment rate unexpectedly fell last quarter as construction companies and manufacturers increased hiring even as the economy contracted.
The seasonally adjusted jobless rate fell to 2 percent in the three months through June from 2.1 percent the previous quarter, the Ministry of Manpower said in a statement today. The median estimate of nine economists surveyed by Bloomberg News was for a rate of 2.2 percent. The economy added 29,200 jobs last quarter, compared with 27,200 in the previous period.
The Southeast Asian nation’s industrial output and exports rose more than economists estimated in June, while sales of homes by property developers such as CapitaLand Ltd. led to a rebound in private residential prices last quarter. The government is also building more public housing to meet the demands of an increasing population, holding up the island’s job market even as a faltering global recovery hurts growth prospects from Singapore to Taiwan.
“We do not expect a sharp deterioration in the labor market even as the economic outlook remains dotted with risks,” said Irvin Seah, a Singapore-based economist at DBS Group Holdings Ltd. “There’s a healthy pipeline of public transportation and residential projects which is supporting hiring in the construction sector.”
The services industry added 15,500 jobs last quarter, while manufacturing companies increased payrolls by 4,500, the report showed, citing preliminary data. Construction employment rose 9,500 in the three months through June.
The central bank said last week the island’s growth may fall below 1 percent should the U.S. and Chinese economies slump and the European crisis worsen significantly. The government currently predicts gross domestic product will increase 1 percent to 3 percent in 2012.
Singapore’s GDP fell an annualized 1.1 percent in the three months through June from the previous quarter.