Manufacturing employment rebounds for first time in 27 months

Manufacturing employment turned positive last month for the first time in 27 months, while overall employment posted gains above 100,000 for the third consecutive month.

However, deepening weakness in accommodation, food service and construction hiring — along with a drop in the youth employment rate — highlighted a growing divergence across sectors. The government identified rising tensions in the Middle East as a downside risk to employment and said it would develop a "National Jobs Project" encompassing both private and public job creation.

According to the September employment trends report released Friday by the Ministry of Economy and Finance and the Ministry of Employment and Labor, the number of employed people rose by 113,000 from a year earlier. The gain was smaller than the 184,000 recorded in August but extended a streak of six-figure monthly increases to three months, following a rise of 108,000 in July.

The government attributed the narrower gain partly to a base effect from September last year, when employment surged by 312,000. Seasonally adjusted employment rose by 40,000 from the previous month, marking four consecutive months of growth. The seasonally adjusted figure reached about 28.985 million, surpassing the previous record of about 28.956 million set in February this year, before the outbreak of the war in the Middle East.

Manufacturing employment rebounded, swinging from a decline of 38,000 in August to an increase of 16,000 in September — the first gain since June 2024. The government said sustained positive business sentiment, combined with a lagged effect from strong exports, contributed to the improvement.

In contrast, the pace of growth in service sector employment slowed from 345,000 in August to 221,000 in September. Health and social welfare services added 207,000 jobs and public administration added 27,000, but employment in all other service industries fell by 13,000.

Sectors closely tied to domestic consumption weakened. Accommodation and food service employment fell by 97,000, a steeper drop than the 61,000 decline in August. Wholesale and retail trade swung from a gain of 21,000 in August to a loss of 1,000 in September. Arts, sports and leisure services also saw their employment growth shrink from 73,000 to 19,000.

Transportation and warehousing added 54,000 jobs, a larger increase than the previous month. Finance and insurance and information and communications technology each added 32,000 and 10,000 jobs, respectively. Professional, scientific and technology services held steady compared with a year earlier, breaking a streak of year-on-year declines that had persisted since November last year.

Construction employment fell by 48,000, widening from a decline of 32,000 the previous month. The government said that although construction output had returned to growth, a base effect from last year, deteriorating supply conditions for materials and rising construction costs all weighed on hiring. Agriculture, forestry and fisheries employment fell by 94,000.

Youth employment continued to struggle. The employment rate for those aged 15 to 29 fell 1.1 percentage points from a year earlier to 44.0 percent, while the unemployment rate rose 0.6 percentage points to 5.4 percent. Expanding the age range to 15 to 34, as defined under the Special Act on Promotion of Youth Employment, the employment rate slipped 0.4 percentage points to 56.1 percent and the unemployment rate edged up 0.1 percentage points to 4.2 percent.

However, the number of people aged 15 to 29 classified as "resting" — neither working nor actively seeking employment — fell to 364,000, declining for the eighth consecutive month compared with a year earlier. The government said the drop in youth employment was largely driven by weakness in accommodation and food service, industries that employ a disproportionately large share of young workers.

The overall employment rate for those aged 15 and older fell 0.2 percentage points to 63.5 percent. The employment rate for those aged 15 to 64, however, rose 0.2 percentage points to 70.6 percent, a record high for September. The overall unemployment rate edged down 0.1 percentage points to 2.0 percent.

By employment type, the number of permanent wage workers rose by 253,000 — the largest increase since November last year. Permanent workers accounted for 57.8 percent of all employed people, also a record high for September. Temporary and daily workers fell by 81,000 and 55,000, respectively.

The government said the base effect from last year's employment gains would ease in October, but warned that escalating tensions in the Middle East could act as a downside factor for the labor market.

In response, the government plans to develop a "National Jobs Project" to spread the benefits of economic growth through job creation in both the private and public sectors. For industries with persistent hiring weakness — including construction and agriculture, forestry and fisheries — dedicated task forces will work to identify ways to boost industrial vitality, develop the workforce and improve working conditions. Preparatory work, including implementation and outreach, will also begin for the "Youth Employment Recovery Plan" set for full rollout next year.