SINGAPORE -- Singapore faces an increasing threat of long-term unemployment, a government advisory panel said Friday, with executives and rank-and-file workers finding their skills obsolete in a revamping of the economy.

Unemployment is already running at 4.8 percent and rising, and the state-appointed Economic Review Committee said that looking forward workers are likely to face more frequent job displacement, AFP reported.

"The challenges we face are tremendous," the committee, chaired by the Deputy Secretary General of the National Trade Union Council, Heng Chee How, said in its report.

"Professionals, managers and executives are also emerging as a new, vulnerable group, alongside their rank-and-file counterparts," it said. "In a knowledge-based economy they will find themselves facing the same challenge of skills obsolescence."

The committee had been investigating the impact of the restructuring process export-reliant Singapore is going through as it attempts to reinvent itself in the face of growing competition from regional neighbors with cheaper labor costs.

A raft of ideas floated in recent months included a revamp of the compulsory state pension fund to free up more funds, and tax cuts.

One committee recommended establishing a "creative economy", to make the tiny city-state Southeast Asia's answer to London, New York and San Francisco.

"We expect more frequent job displacements at all levels of employment," Heng told a news conference. "The employment structure will change. This means that we can expect a lot more contracting out, outsourcing, non-permanent forms of work, all that in the drive towards flexibility."

Heng said Singaporeans could no longer expect life-time employment coupled with pay rises.

"There is an increased threat of long-term employment because many of the displaced jobs will not return," he said.

The report was released just three days after the National Wages Council recommended salaries be cut or frozen through the first half of next year to try to save jobs in the economic downturn.

Heng's committee said there would be new requirements for skills "and an increasing threat of long-term unemployment", with the pressure of competition "also translating into reduced job security".

It identified the acquisition of new skills to take on changing jobs or entirely new careers as key to maintaining employability.