Title: Labour Market Expansion and Wage Growth: An Analysis of Singapore’s Labour Market Trends in 2025 and Q1 2026
Abstract: This paper examines the labour market trends in Singapore, with a focus on the expansion of the labour market in 2025 and the expected wage growth in Q1 2026. Based on preliminary data from the Ministry of Manpower (MOM), we find that one in four employers polled expect to increase wages in Q1 2026, amidst a tight labour market. The paper analyzes the labour market conditions in 2025, including the unemployment rates, and discusses the implications of the expected wage growth on the labour market and the economy as a whole.
Introduction: The labour market in Singapore has experienced significant growth and transformation in recent years. The country’s strong economic performance, coupled with a highly skilled and productive workforce, has contributed to a tight labour market. According to the Ministry of Manpower (MOM), the unemployment rates in Singapore remained broadly unchanged at 2% throughout 2025, similar to those seen over the preceding two years. This paper examines the labour market trends in Singapore, with a focus on the expansion of the labour market in 2025 and the expected wage growth in Q1 2026.
Labour Market Conditions in 2025: The labour market in Singapore experienced a period of sustained growth in 2025, with the unemployment rates remaining low at 2%. This is consistent with the trend observed over the preceding two years, where the unemployment rates remained relatively stable. The low unemployment rates reflect the strong labour market conditions, with a high demand for labour and a shortage of skilled workers in certain sectors.
The labour market expansion in 2025 was driven by various factors, including the growth of key sectors such as technology, finance, and healthcare. These sectors have been experiencing rapid growth, driven by advances in technology, changes in consumer behavior, and an aging population. The growth of these sectors has created new job opportunities, contributing to the expansion of the labour market.
Expected Wage Growth in Q1 2026: According to preliminary data from the MOM, one in four employers polled expect to increase wages in Q1 2026. This is a significant development, as it suggests that employers are facing increasing pressure to attract and retain talent in a tight labour market. The expected wage growth is likely to be driven by the strong labour market conditions, with employers competing for a limited pool of skilled workers.
The expected wage growth in Q1 2026 has significant implications for the labour market and the economy as a whole. On the one hand, it is likely to lead to an increase in labour costs, which could impact business profitability and competitiveness. On the other hand, it is likely to lead to an increase in consumer spending, as workers benefit from higher wages and increased purchasing power.
Discussion: The labour market expansion in 2025 and the expected wage growth in Q1 2026 reflect the strong labour market conditions in Singapore. The low unemployment rates and the high demand for labour have created a tight labour market, with employers competing for a limited pool of skilled workers. The expected wage growth is likely to lead to an increase in labour costs, but it is also likely to lead to an increase in consumer spending and economic growth.
The labour market trends in Singapore have significant implications for policymakers, businesses, and workers. Policymakers need to ensure that the labour market remains flexible and responsive to changing economic conditions, while also protecting the rights and interests of workers. Businesses need to adapt to the changing labour market conditions, by investing in worker training and development, and by offering competitive wages and benefits. Workers need to be equipped with the skills and knowledge required to compete in a rapidly changing labour market.
Conclusion: In conclusion, the labour market expansion in 2025 and the expected wage growth in Q1 2026 reflect the strong labour market conditions in Singapore. The low unemployment rates and the high demand for labour have created a tight labour market, with employers competing for a limited pool of skilled workers. The expected wage growth is likely to lead to an increase in labour costs, but it is also likely to lead to an increase in consumer spending and economic growth. As the labour market continues to evolve, it is essential that policymakers, businesses, and workers work together to ensure that the labour market remains flexible, responsive, and equitable.
Recommendations:
Investment in worker training and development: Businesses should invest in worker training and development, to ensure that workers have the skills and knowledge required to compete in a rapidly changing labour market.
Competitive wages and benefits: Businesses should offer competitive wages and benefits, to attract and retain talent in a tight labour market.
Labour market flexibility: Policymakers should ensure that the labour market remains flexible and responsive to changing economic conditions, while also protecting the rights and interests of workers.
Education and skills training: Policymakers should invest in education and skills training, to ensure that workers have the skills and knowledge required to compete in a rapidly changing labour market.
Future Research: Future research should focus on the impact of the expected wage growth on the labour market and the economy as a whole. It should also examine the implications of the labour market trends for policymakers, businesses, and workers, and provide recommendations for ensuring that the labour market remains flexible, responsive, and equitable. Additionally, research should be conducted on the effectiveness of policies aimed at promoting labour market flexibility and competitiveness, and on the impact of technological change on the labour market.