Strong job market, wealth gains to underpin Singapore retail spending in 2026: Economists

SINGAPORE - Consumer spending in Singapore is likely to remain robust in 2026, supported by improving job prospects and steady investment returns, economists said.

In 2025, consumers here spent most on travel and household necessities, helped by a strong Singapore dollar and a resilient labour market.

Retail spending in Singapore is forecast to expand by around 3.5 per cent to 4 per cent in 2026, said Maybank senior economist Chua Hak Bin, adding that while this is slower than the pace seen in recent months, it is much faster than the first half of 2025.

Retail sales, which grew by an average of just 1.2 per cent in the first half of 2025, picked up strongly from July onwards, when a fresh batch of CDC and SG60 vouchers were handed out, he said.

The vouchers boosted shopping at supermarkets, particularly for the months of July and August, when supermarket sales rose by more than 8.5 per cent per month.

While economic growth and employment are expected to remain healthy and support retail spending in 2026, fiscal handouts will be less generous in terms of cash payouts and CDC vouchers in Budget 2026, said Dr Chua.

But spending on discretionary items and recreational goods have also been very strong, particularly over the last few months, and this should continue in the year ahead.

“Singaporeans must be feeling wealthier, possibly because of rising stock and property prices, or more confidence over the job outlook,” said Dr Chua, noting that wages, after accounting for inflation, are projected to rise by more than 4 per cent in 2026.

Total employment in

Singapore rose by 24,800 in the July to September period,

more than doubling the increase of 10,400 in the previous quarter, according to the Ministry of Manpower’s third-quarter labour market report released in December.

The Singapore stock market also improved in 2025, with the Straits Times Index up by 22.4 per cent year to date.

Local equities received a boost from the Equity Market Development Programme, a $5 billion initiative launched by the Monetary Authority of Singapore to invest in local stocks.

Maybank’s Dr Chua added that lower interest rates could continue to help reduce mortgage servicing costs, leaving households with more disposable income.

Among those who spent more on discretionary goods in 2025 is Mr Leong, 30, who splurged on two television sets and a bed after receiving a pay increase at work.

“I spent $4,800 on a nicer bed and $2,700 on television sets for the house.

“I’ve always slept on a mattress growing up and wanted a bit of luxury in my new house,” said the psychologist who declined to give his full name.

Once he has settled into his new home, his spending priorities are expected to shift towards maintenance, repairs and experiences such as travel.

Other strong-performing retail segments in 2025 include furniture and home-related spending – driven by home completions and move-ins – as well as supermarkets, supported by population growth and job creation, said independent economist Song Seng Wun.

The strong Singapore dollar also diverted more spending overseas, be it a short trip to Johor Bahru, or flights to Thailand, Japan and China for holidays, said Mr Song.

One of the Singaporeans who took advantage of the strong Singdollar in 2025 is Ms Low, 33, who works in social media and also declined to give her full name.

“This year, I spent around $4,000 on flights, hotel accommodation, food and transport combined.

“I travelled with my friends for concerts, and these expenses do not include concert tickets, which I estimate to have spent about $2,500 on,” said Ms Low.

She attended six concerts in 2025, both locally and overseas.

“I enjoy travelling and will travel if the means and opportunities are there. I also love to experience concerts and immerse myself in the entire experience, from pre- to post-concert,” she said.

Watches and jewellery sales are also doing well, driven by the combination of luxury spenders and increased foreign visitor arrivals during China’s summer school holidays between July and August, and the Formula 1 Singapore Grand Prix in early October, said DBS Bank economist Chua Han Teng.

“Motor vehicles also maintained sustained sales momentum, probably due to the growing domestic appeal of relatively lower-cost electric vehicles, particularly from China, and partly due to some front-loaded purchases ahead of expected tapering incentives for cleaner energy vehicles, DBS’ Mr Chua added.

China electric vehicle maker BYD, for example, registered 7,473 cars here in the first nine months of 2025, extending its lead over Toyota and paving the way for it to end 2025 with record high sales in Singapore. BYD sold 6,191 units in 2024.

The food and beverage (F&B) sector did not fare as well despite the distribution of CDC and SG60 vouchers, as restaurant earnings, in particular, continued to contract.

The first 10 months of 2025 saw 3,357 new F&B outlets being registered, but there were also 2,431 closures, said Deputy Prime Minister Gan Kim Yong in November.

More than six in 10 food establishments here that closed between January and October had been registered for five years or less.

Of these, 82 per cent had never recorded a profit in their annual tax declarations, said DPM Gan.

One reason is the wide range of dining options available, which has made consumers more selective about where they eat, increasing competition and putting pressure on food and restaurant businesses, said Mr Song.

“With Michelin and fine dining options now widely available overseas, fewer consumers feel the need to queue or spend heavily in Singapore,” said Mr Song.

This weakness is likely to persist into 2026, he said.

He said retail growth is likely to be driven by continued home completions and furniture purchases, as well as population growth that will support strong demand at supermarkets.

“If the labour market stays resilient and the Singdollar remains strong, people will also continue to spend their strong Singdollar in neighbouring countries,” said Mr Song.