The full-year unemployment rate for 2005 stood at a provisional 3.2 percent, according to the Ministry's web-site, against 3.4 percent in 2004.

The drop in unemployment follows a recovery in the city-state's manufacturing industry and comes as Singapore's economy is set to expand by as much as 5 percent in 2006.

Against such a strong economic backdrop, some political analysts say the government is likely to call a general election as early as the first quarter.

The jobless rate fell sharply in the fourth quarter from 3.3 percent in the previous quarter, and was the lowest since the second quarter of 2001, when the rate was 2.2 percent.

"The services-producing industries added 24,100 workers in the quarter, supported by seasonal hirings for the year-end festivities," the ministry said in its preliminary labour market report.

Total employment expanded by 32,800 in the fourth quarter, bringing the number of new jobs in 2005 to 110,800 -- the strongest increase in nearly five years.

"There has been an improvement in the underlying economy, and we have seen broad-based recovery in various sectors, from property to electronics and transport sectors. So it is not entirely surprising to see an improvement in job numbers," said Song Seng Wun, an economist at CIMB-GK Research.

But Song added that the sharp drop in the fourth-quarter rate could largely be due to seasonal factors, and said he expected the jobless rate to hover at around 3 percent in the coming months.

Manufacturers added 6500 jobs in the fourth quarter while the recovering construction industry added 1500 jobs. The number of job losses rose 10.3 percent in the fourth quarter, from the third quarter, with the bulk of the retrenchment in the manufacturing sector.

Singapore's manufacturing sector, which employs about 18 percent of the city-state's 2.1 million workforce, against one-third a decade ago, is struggling to keep jobs in the face of competition from lower-cost countries such as China and Malaysia.

Hard-disk drive maker Maxtor Corp last year announced it would cut up to 5500 jobs in Singapore.

The government is trying to boost employment in the services sector, with plans to open two casino resorts.

Singapore's trade-dependent economy grew an annualised and seasonally adjusted 9.7 percent in the fourth quarter from the third, boosted by a recovering tech sector and surge in drugs production. The economy expanded 6 percent in 2005, according to government data released last month.

Singapore reports unemployment on a quarterly basis.

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