New report warns of potential moderation in wage growth amid softening business sentiment this year
Real wages in Singapore went up in 2024, according to a new report, as more employers provided wage increases to their staff during the year.
Nominal wages of full-time resident employees went up by 5.6% in 2024, up from 5.2% in 2023, data from the Ministry of Manpower revealed on Wednesday.
Real wages also increased by 3.2% in 2024, significantly higher than the 0.3% recorded the year prior.
"As nominal wage growth outpaced inflation, which has eased from 2023, real wage growth picked up in 2024," MOM said in a statement. "Over the medium-term, real wage growth continues to be supported by real productivity growth."
However, MOM warned that a moderation in nominal wage growth might happen this year amid economic headwinds.
"With geopolitical tensions and global trade uncertainty persisting, business sentiment has softened," it said, noting that there is a "decline" in the share of firms planning to hike wages.
"These developments point to a potential moderation in nominal wage growth in 2025, relative to 2024, particularly in trade-reliant sectors such as Manufacturing and Wholesale Trade."
According to MOM, all employee types experienced wage growth in 2024, including:
"Policy factors, such as increases in the Local Qualifying Salary and the implementation of Progressive Wage Model initiatives, have also contributed to higher wage increases among lower-income employees," MOM said.
The Progressive Wage Model also mainly drove the 8.7% wage growth recorded in the Administrative and Support Services industry, which is the highest across Singapore. Above-average increases were also recorded in:
On the other hand, below-average increases were logged in the Manufacturing (5.1%) and Wholesale Trade (4.2%) industries.
"Below-average increases were seen and are expected to further moderate in the coming year, given the ongoing geopolitical and trade tensions," MOM said.
Meanwhile, MOM data also revealed that 78.3% of employers increased their staff's wages in 2024, higher than the 65.6% in 2023.
Only 18.5% of employers said there was no change in wages, while a smaller 3.2% said they implemented a wage cut.
"A majority of establishments gave the increases due to past organisational performance rather than forward-looking confidence," MOM said.
Among the organisations that hiked wages, the average increase slightly moderated to 6.6% in 2024 from the previous year's 7.2%.
"However, among establishments which cut wages, the magnitude of the wage cut was smaller in 2024 (-3.6%) than in 2023 (-6.2%)," MOM said.
