Labour market expands in 2025, 1 in 4 employers polled expects to raise wages in Q1 2026: MOM
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Singapore's unemployment rates throughout 2025 remained broadly unchanged at 2 per cent, similar to those seen over the preceding two years.
PHOTO: ST FILE
SINGAPORE – The Singapore labour market continued to expand in the fourth quarter of 2025 and over the full-year period, while unemployment and retrenchments remained low.
The expansion is expected to continue in the first quarter of 2026, and about one in four employers expects to increase wages amid a tight labour market, preliminary data from the Ministry of Manpower (MOM) showed on Jan 29.
Its polls found that a larger share of companies is looking to increase staff salaries over the same period, up from 19.3 per cent in September 2025 to 26.4 per cent in December 2025. This reflects “improving business outcomes and continued competition for labour in certain areas”, MOM said.
Singapore’s total employment – or the number of Singapore residents and foreign workers with jobs – grew by 19,600 in the October-to-December period, lower than the growth of 25,100 in the third quarter, but higher than the growth in the first half of 2025.
For the full year, total employment grew by 57,300, outpacing the growth of 44,500 in 2024.
In 2025, resident employment growth – Singaporeans and permanent residents – was concentrated in financial services and health and social services. Meanwhile, foreign employment continued to be driven by the construction sector, primarily comprising work permit holders.
Unemployment rates throughout 2025 remained broadly unchanged at 2 per cent, similar to those seen over the preceding two years. The total number of retrenchments increased to 14,400 in 2025, up from 13,020 in 2024.
“The increase largely reflects higher retrenchments earlier in the first three quarters of 2025 compared with the preceding year,” MOM said. Corporate restructuring was the primary reason companies cited for laying off workers in 2025.
Looking ahead, the labour market is expected to continue expanding amid increased hiring caution, the ministry noted. Its polls found that the share of companies expecting to hire in the next three months edged down slightly from 44.1 per cent in September to 43.3 per cent in December.
The ministry added that the share of companies expecting to retrench workers also increased from 2.3 per cent to 4.3 per cent over the same period. But it “remains low”, MOM said, suggesting selective workforce adjustments rather than broad-based job cuts.
The Monetary Authority of Singapore (MAS) said in its Jan 29 review that further ahead, the steady economic expansion in the domestic-oriented sectors should underpin job creation.
It added that continuing firm productivity growth in sectors such as manufacturing and information and communication services, which far exceeds the overall economy’s productivity growth in the first three quarters of 2025, should cap excessive labour demand in the economy.
MAS noted that job growth for Singaporeans and permanent residents will also be supported by tighter foreign workforce policies in 2026, including higher minimum qualifying salaries for the renewal of Employment and S passes.
Even with stable headline indicators, some workers – including young graduates and those in transforming industries – face uncertainty as skills requirements evolve, said National Trades Union Congress assistant secretary-general Yeo Wan Ling.
As technologies like artificial intelligence (AI) reshape work, she said that early support for workers to reskill, adapt and move into new roles “becomes even more important”.
Founder of recruitment agency Recruit Fast Joshua Woo said companies increasingly seek its services to reshape their workforce, deciding which roles to hire, redesign or pause.
He said more companies are planning for wage increases, largely because of competition for talent and retention pressures in a tight labour market. As wage adjustments often reflect market realities, companies are also responding to rising living costs and higher expectations from employees.
OCBC Bank chief economist Selena Ling said wage growth prospects for skilled talent in highly sought-after sectors like AI-related ones or cybersecurity are likely to be bright.
Referring to MAS’ 2026 forecasts for core and all-items inflation
She added that there are growth industries that are still hiring, such as data processing and software development, precision engineering, construction and early childhood, noting that job seekers in these sectors should have a positive outlook.
“However, if they are in the food and beverage or retail sectors which are facing challenges of high business costs, any downturn in demand conditions is likely to translate quickly into downward wage pressures or even displacement.”
