In his annual May Day speech, Prime Minister Lee Hsien Loong noted that unemployment increased last year and even with better growth in 2017, the Government expects a "steady trickle of redundancies" as the economy continues to restructure.Ageing workforce, technological changes and a global economy that has yet to completely shake off the ills of the 2008 global financial crisis are the problems that the economy is facing.

It is impossible to have minimal or zero unemployment,as stated by economists.“In any healthy economy, there will always be people switching jobs or graduates joining the labour force so there will always be some degree of frictional unemployment,” explained Nomura economist Brian Tan. “This in itself is not a problem… because it is impossible to have a zero per cent unemployment rate, which is a common misperception.”

In addition, cyclical downturns or shifts in industries which render jobs and skills obsolete will also lead to structural unemployment, which is caused by a mismatch in the skills of a worker and those required by an employer. 

Unemployment in Singapore remains relatively low by international standards and that boils down to reasons such as having a small and educated workforce, as well as extensive planning by the Government to ensure the economy stays on the right track, according to economists.In order to stay relevant,singapore has attracted foreign companies in order to invest in singapore's economy.

By attracting cheap foreign labour,they act as an unemployment buffer for singapore,thus ensuring that unemployment rates do not plummet into dangerous levels.

"In developed countries, the proportion of foreign workers is much lower, and many foreigners are also entitled to stay on in the country without work, unlike Singapore. So when people lose their jobs, they become unemployment statistics. (But) in Singapore, all non-Singaporeans who lose their jobs just go home.”
Economists that Channel NewsAsia spoke to do not think that unemployment will return to the levels of 3.3 per cent and 4.8 per cent, last seen during the 2008 global financial crisis and the Severe Acute Respiratory Syndrome (SARS) epidemic in 2003, respectively.

"We are not in an outright recession here and there's no financial crisis brewing in the horizon so there's no reason to be too pessimistic or expect a sharp spike in the near-term unemployment rate," said OCBC Bank's treasury research and strategy head Selena Ling, who expects jobless figures to stabilise around 2.5 per cent this year.

The 1997/1998 Asian financial crisis, the dotcom bust in 2001, the SARS outbreak in 2003 and the global financial crisis in 2008, cause companies to be too afraid to hire more workers due to rising cost of wages.

Still, worries linger ahead even as recent data portray a rosier growth outlook for Singapore.

Thanks largely to an export-led rebound in the manufacturing sector, which makes up one-fifth of the economy, Singapore's gross domestic product (GDP) picked up speed in the last quarter of 2016 and the positive momentum has since extended into the first three months of 2017.

As the turnaround appears limited to just the electronics and biomedical manufacturing clusters, economists call this "uneven recovery" of the economy.

Despite only one sector of the economy doing well, economists believe that the economy will continue to weaken, which is the manufacturing sector.This is because the recent pick-up in GDP is driven by certain segments within manufacturing but if you look beyond that, other parts of the economy are not doing well." 

The bulk of employment growth remains driven primarily by the services sector. "Manufacturing has not been creating net jobs so the contribution to growth over the past few months may not translate into an uptick in labour demand."

"The challenges faced by the labour market are not just about decreasing job creation and rising lay-offs due to a slower economy. Instead, a bigger worry looms in the form of structural unemployment." experts said.

"We shouldn't discount the bigger issue of industry and technological change. When entire industries change, jobs get automated and become obsolete," said Mr Tan.

"We are starting to see rising structural unemployment, especially among the higher-skilled older PMETs (professionals, managers, executives and technicians). They have become so specialised that if the industry goes downhill and they lose their jobs, they are in trouble because their skill sets are not transferable," he added.

On multiple occasions,the government has expressed its concerns about growing mismatches between jobs and the skills of the labour force. Manpower Minister Lim Swee Say mentioned  "A shortage of skills is likely to be the catalyst for higher unemployment in the future, rather than a lack of jobs."
After all, the speed of which Singapore restructures its industries to stay competitive and the ability of its workers to develop new skills to stay relevant is of paramount importance in the employability of the people in the labour force.

GDP is considered the broadest indicator of economic output and growth .It takes inflation into account, allowing for comparisons against other historical time periods. The bureau of economic analysis issues its own analysis document with each GDP release, which is a great investor tool for analysing figures and trends. The data is released quarterly.