Singapore's job market to soften, wage growth to slow: reports

MAS predicting local economic growth, easing inflation in 2024

Singapore's job market to soften, wage growth to slow: reports

The job market in Singapore is predicted to soften this year, with a slowdown in wage growth also expected, according to reports.

The ASEAN Briefing, citing the Monetary Authority of Singapore (MAS), reported that expectations for Singapore's job market show a "softening trend ahead."

According to the report, overall employment growth will likely be driven by domestic services and travel services that are recovering from the pandemic.

The projection comes as the overall employment rate in Singapore declined in 2023, based on the data from the Ministry of Manpower (MOM).

MOM's data showed that overall employment rate declined to 66.23% last year, with the government warning that "economic headwinds" will continue affecting the country's labour market.

But the MAS forecast said an increase in resident unemployment could be unlikely, even with a projected stronger demand for external-facing industries, according to the ASEAN Briefing's report.

Predictions on wage growth

Meanwhile, MAS also warned of a "notable slowdown" in wage growth this year, attributing the situation to declining nominal GDP and the normalisation of bonuses.

A previous survey from the ManpowerGroup among over 500 Singaporean employers revealed that 84% are planning to extend bonuses averaging one month or more in 2023/2024.

According to the authority, the anticipated wage moderation is in line with the shifting economic landscape, the ASEAN Briefing reported.

But there are also predictions that real wages will likely rebound in 2024. ECA International is expecting a 0.5% increase in real wages this year, after a 1.5% decline in 2023.

"Singapore was expected to see a return to real salary growth in 2023," said Mark Harrison, General Manager, Asia for ECA International, in a previous statement. "However, as a relatively high rate of inflation persisted, workers in Singapore are worse off [in 2023] in real terms than they were in 2022."

Economic growth for 2024

This year, however, MAS is predicting an easing inflation rate as well as local economic growth.

Projections for this year indicate a GDP growth of approximately 2.3%, coupled with a notable easing of the inflation rate, the ASEAN Briefing reported.

MAS is also expecting transformation in the economic landscape, with key sectors such as food and beverage, travel and tourism, electronics, manufacturing, and trade showing promise. However, challenges may persist in the banking and financial, as well as commodity supplies sectors, according to the report.

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