Singapore workers to get 2.9% pay raise next year: Survey

A survey by human resources firm ECA International noted that bosses are preparing to lift pay by about 4 per cent. However, with "Singapore transitioning from 0.3 per cent deflation this year to 1.1 per cent inflation next year", real wage increases
A survey by human resources firm ECA International noted that bosses are preparing to lift pay by about 4 per cent. However, with "Singapore transitioning from 0.3 per cent deflation this year to 1.1 per cent inflation next year", real wage increases for employees will be affected.ST FILE PHOTO

But ECA International adds that real wage increase will take a hit as country moves from deflation to inflation

Workers in Singapore can expect pay rises of about 2.9 per cent next year, once inflation is taken into account, down from last year, according to a survey released yesterday.

The poll noted that bosses are preparing to lift pay by about 4 per cent. However, with "Singapore transitioning from 0.3 per cent deflation this year to 1.1 per cent inflation next year, real wage increases for employees will take a hit".

The generous 4.3 per cent average real wage increases enjoyed this year will not be seen next year, it added.

"The open, trade-dominated economy of Singapore is withstanding the deceleration of growth in China reasonably well, but is nevertheless experiencing a slowdown itself," said Mr Lee Quane, director for Asia at human resources firm ECA International, which released the annual survey of about 260 firms including large local companies and multinationals, from 72 countries.

The expected 2.9 per cent average pay rise in Singapore next year would be higher than the estimated average of 2.6 per cent across the rest of the Asia-Pacific region studied by ECA.

Malaysia-based workers should see a similar pattern emerge, said ECA.

The forecast for real wage increases is 2 per cent next year, from 3.1 per cent experienced this year, owing to rising inflation.

Mr Quane said that low unemployment continues to "exert upward pressure" on wages in Malaysia, but as labour costs here are higher than in rival economies, investors tend to move.

The regional economic slowdown is contributing to rising inflation, which is why those in Malaysia will be worse off next year.

After taking inflation into account, the biggest pay rises in the Asia-Pacific are forecast for Vietnam, where companies are expecting 5.4 per cent increases on average.

It is also offering the second- highest global real wage increase next year.

Hong Kongers will see their salaries rise an average of 4 per cent again next year, but after factoring in inflation - tipped at 2.6 per cent in 2017 - they will experience the third-lowest wage rise in the Asia- Pacific, estimated to be a 1.4 per cent increase in real terms.

Mr Quane added that China's downturn is reducing demand and trade throughout the region and this is affecting places such as Singapore, with rising inflation forecast next year.

A version of this article appeared in the print edition of The Straits Times on November 10, 2016, with the headline 'S'pore workers to get 2.9% pay rise next year: Survey'. Print Edition | Subscribe