Singapore's unemployment rate hit a decade-low of 1.7 percent

SINGAPORE, Nov 29 - Singapore will allow construction and manufacturing companies to hire more foreign workers to help cope with an increasingly tight labour market in the fast-growing city-state.

The move, to be implemented next year, comes after Singapore's unemployment rate hit a decade-low of 1.7 percent in the third quarter, and amid increasing investor concern that the $129 billion economy may overheat.

"Far more jobs are being created than locals can fill," Singapore's Ministry of Manpower said in a statement released late on Wednesday, adding that companies found it increasingly difficult to find workers, particularly locals.

It was not immediately clear how many more foreign workers may be allowed into the country as a result of the move.

Singapore is set for economic growth of at least 7-8 percent this year, reflecting buoyant construction across the small island, a rebound in manufacturing and strong business for bankers and fund managers. But it also faces rising prices from higher costs for fuel, housing and wages.

Employment rose by 57,600 new jobs in the third quarter after a record 64,400 jobs in the second quarter.

Earlier this year, the government launched a scheme that would allow skilled foreign professionals working in Singapore to stay in the country for up to six months after they left a job to look for new employment.

From March 2008 onwards, foreign professionals whose last monthly salary outside Singapore was at least S$7,000 will be able to receive a so-called Personalised Employment Pass allowing them to stay for a job search.