New government data shows moderating labour demand amid 'more cautious' businesses
Fewer employers in Singapore are planning to hire workers and hike wages in the next three months as labour demand moderates amid global economic uncertainty.
This is according to the Ministry of Manpower's Labour Market Advance Release for the first quarter of 2025.
It found that only 40.5% of employers indicated plans to hire in the next three months, down from 46.3% in December. Only 21.7% of employers are also planning to raise wages in the coming months, significantly lower than the 31.6% in December 2024.
"MOM's forward-looking polls in March 2025 found that business sentiments have become more cautious, compared to the more optimistic outlook in December 2024," the report read.
Callam Pickering, APAC senior economist at Indeed, said businesses are "understandably more cautious."
"We are beginning to see that across a range of economic indicators," Pickering said in a statement to HRD. "The economic outlook isn't as strong as it was even a few months ago and that will weigh upon the hiring decisions of employers."
The lower hiring plans are a further indication of Singapore's moderating labour demand, after the first quarter saw higher unemployment and slower employment growth.
The unemployment rate increased in the first quarter of 2025 to 2.9%, up from 2.8% in December.
On the other hand, the pace of growth of Singapore's total employment rate slowed down in the first quarter after only growing by 2,300. This is much lower than the 7,700 increase recorded in December 2024, and 3,200 recorded in the same period last year.
According to MOM's report, resident employment went down in outward-oriented sectors, such as Professional Services, Manufacturing, and Information and Communications.
"Resident employment also declined in Retail Trade, as seasonal hiring for the year-end festive period eased," the report read.
On the other hand, Health and Social Services as well as the Financial Services reported employment increases.
For non-resident employment, MOM said the growth was supported by work permit holders, with increases recorded in Administrative & Support Services and Community, Social & Personal Services.
Retrenchments also fell to 3,300 in the first quarter of 2025, down from 3,680 in the previous quarter.
According to the report, the top reason for retrenchments in the first quarter was business reorganisation or restructuring, with recession or downturn in the industry only accounting for a small portion of layoffs.
"The retrenchment rate remains quite low, highlighting the ongoing resilience of Singapore's business sector and overall economy," Pickering said.
Pickering said Singapore's labour market remains "very tight" compared to other countries.
"But we'd expect that to loosen over the remainder of the year," the economist noted. "That said, we must also acknowledge that the Singapore and global economies are operating in an unusually uncertain environment and Singapore businesses will need to be nimble while managing those risks."
The uncertain economic environment is a result of recent global developments, such as US President Donald Trump's sweeping tariffs, with a 10% baseline tariff imposed in Singapore.
Deputy Prime Minister Gan Kim Yong recently held talks with US Secretary of Commerce Howard Lutnick over the business ties between Singapore and the US.
"While the US is not prepared to lower its 10% baseline tariff, we agreed to explore how we could deepen our economic links positively and we will continue to discuss the practical way forward," Gan said on LinkedIn.
Gan is also heading the recently established Singapore Economic Resilience Taskforce, which aims to help businesses and workers navigate the uncertainties following Trump's tariffs.
