According to the Ministry of Trade and Industry (MTI), the impact Covid-19 has on employment in Singapore far surpasses more than any other crisis in history, such as SARs and even the Asian Financial Crisis.
This is because the impact of covid-19 comes in five different transmission channels, each dealing blows to the market in their own ways.
The first would be the fall in international air visitors and air arrivals, affecting the aviation industry as well as tourism. 2020 saw an 85.7% drop in visitors’ arrivals as compared to 2019, due to global travel restrictions as well as border closures. In fact, most of the arrivals were concentrated largely within the first two months too, before Singapore proceeded to go into lockdown in March. As such, the aviation industry was severely affected, with Singapore Airlines (SIA) severely affected with a 98% drop in passenger travel as well as net loss of 4.27bn SGD. While other countries such as China and the USA could rely on domestic travel for recovery later on, Singapore could only rely on border reopenings as an international hub. As for the tourist industry, they had to innovate and attempt to appeal towards local residents in an attempt to reap profits from domestic tourism instead.
In addition, the consumers-related sectors such as Food and Beverages (F&B) and services like retail are also severely impacted. Retail sales, excluding motor vehicle sales, fell by 15%. F&B sales saw a fall in sales by 26%, which marked the worst performance seen since 1986. The situation was even worse during the most severe period, the first circuit breaker when dining in was not allowed at all, with retail and F&B sales falling nearly by half. Fortunately, the rise in delivery services and eateries who were able to adapt managed to stay afloat. Physical retail stores who have successfully transitioned into offering online shopping services also found themselves staying afloat. Still, a large part of the Singaporean consumer’s pastime, aka going to the malls for food and retail, has been irreversibly changed.
Weak external demand, as well as supply chain disruptions (which continues even today) has resulted in sectors like wholesale trade and water transport being affected too. However, it does seem to be on a road to recovery, judging by recent news of export growth rates “exploding” in 2021.
Spillover from the slowdown of domestic economic activity has affected certain sectors in more subtle ways, with the real estate sector seeing a decrease in demand. Interestingly, the pandemic has also caused a surge in demand for life insurance, as people start to consider buying protection for themselves and their loved ones.
Lastly, restrictions on travel as well as fall in demand across several sectors like real estate has led to a crunch in manpower, especially in foreign labour-heavy industries like construction and marine. The spread of Covid-19 in workers’ dormitories was one of such disruption, with not only economic activity decreasing, but issues like visas expiring presented further complications too.
Overall, the most severely impacted industry in terms of employment is F&B, with a fall of 21,100 people in employment, followed by wholesale trade. However, other sectors like information and communications as well as finance and insurance saw a growth instead.