[SINGAPORE] Employment growth slowed and unemployment rose in the first quarter of 2025, with the Ministry of Manpower (MOM) expecting the labour market to continue softening due to greater uncertainty in external growth prospects.
Similarly, economists also expect things to worsen. Maybank economist Chua Hak Bin warned that employment could even shrink in the second half, with the unemployment rate climbing towards 3.5 per cent by year end.
In Q1, total employment grew by 2,300, based on advance figures from MOM on Monday (Apr 28).
This was below the previous quarter’s increase of 7,700 – which MOM described as seasonal – and also lower than the year-ago increase of 3,200.
This was due to smaller increases in both resident and non-resident employment.
Resident employment continued to increase in the health and social services sector, as well as financial services. But it contracted in some outward-oriented sectors such as professional services, manufacturing, and information and communications.
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Meanwhile, growth in non-resident employment was driven entirely by work permit holders in lower-skilled jobs, mainly in administrative and support services, and community, social and personal services sectors.
Unemployment rose slightly, with the resident unemployment rate at 2.9 per cent between January and March, up marginally from 2.8 per cent in December.
The citizen unemployment rate was 3.1 per cent in March, holding steady from February but higher than December’s 2.9 per cent rate. Unemployment rates “remained within the non-recessionary range”, said MOM.
But there were fewer retrenchments – 3,300, down from 3,680 in the previous quarter. There were 1.3 retrenchments per 1,000 employees, a slight decline from 1.5 in Q4 2024.
Both the fall in employment growth – “particularly in some outward-oriented sectors” – and slight rise in unemployment mirror “the deterioration in Singapore’s economic outlook”, said MOM.
The ministry noted that business sentiments have turned more cautious. In a March poll, fewer employers expect to hire or raise wages in the next three months, compared to in December.
“Whilst the labour market has continued to expand, MOM expects the labour market to soften going forward, given greater uncertainties in external growth prospects,” said MOM.
On Apr 14, Singapore’s official full-year growth forecast range was downgraded to between 0 and 2 per cent, down from between 1 and 3 per cent previously.
This came as Q1 growth slowed to 3.8 per cent, from 5 per cent in the previous quarter, based on advance estimates.
Hiring on hold
Singapore’s labour market resilience may be increasingly tested, with businesses already growing more cautious on hiring and wage increases, said DBS economist Chua Han Teng.
Though the current slowing of labour demand is more evident in outward-oriented sectors, the second half of 2025 could see further weakening as US-led tariff developments weigh on Singapore’s trade-related activities, he added.
Similarly, OCBC chief economist Selena Ling said that hiring intentions have already been put on hold as businesses rethink investment and expansion plans.
While employment softness should remain limited for now, she cautioned that broader downside risks could materialise once higher tariffs kick in.
