According to a preliminary report released by the Ministry of Manpower (MOM), signs of softening are emerging in certain sectors. While employment is expected to continue expanding, its pace will be more moderate than 2024.
MOM believes that looking ahead, global economic uncertainty is expected to persist and may weigh on hiring and wage growth, particularly in outward-oriented sectors.
Business sentiment for Singapore employers remains cautious, with hiring and wage expectations for 3Q2025 dipping slightly from the previous quarter.
MOM’s business expectations polls showed that the proportion of firms expecting to hire declined slightly from 44.0% in 2Q 2025 to 43.7% in 3Q 2025.
The proportion of firms which expect to raise wages also declined, from 24.4% to 22.4%.
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So then, what’s up?
- There was higher employment growth for Singapore workers in 2Q 2025 compared to 1Q 2025 and 4Q 2024. As a result, total employment growth continued to expand in2Q 2025 (8,400), but at a slower pace compared to 2Q 2024 (11,300).
- Resident employment growth continued to increase in Financial Services, Health and Social Services
- After a decline in the past two months, unemployment rates in June 2025 (resident: 2.9%, citizen: 3.0%) rose back to rates seen in March 2025. It’s important to take note though, that unemployment rates remain within the non-recessionary range.
What about what’s down?
- Some outward-oriented sectors such as Professional Services, Information and Communications registered further declines amid ongoing economic headwinds.
- Resident employment also declined in Retail Trade, as employers continued to release workers after the seasonal hiring in 4Q 2024 for year-end festivities.
- The number of retrenchments remained stable at 3,500 in 2Q 2025, comparable to 1Q 2025(3,590). Retrenchments were either stable or lower across most sectors, with business reorganisation or restructuring remaining the top reason for retrenchments in 2Q 2025.
- Declines in wage expectations were observed in sectors such as Financial & Insurance Services, Professional Services, and Transportation and Storage.
Now what’s next?
According to advanced estimates from the Ministry of Trade and Industry (MTI) in mid-July, Singapore’s economy grew 4.3% in the second quarter of 2025, faster than the 4.1% growth in the first quarter of the year.
This is significant as earlier in the year, MTI had lowered Singapore’s gross domestic product (GDP) growth forecast for 2025 to a range of 0-2%, having weighed in the effect of US tariffs on imports from Singapore. It had also previously forecasted 1-3% growth for the year.
However, MTI also believes that for the rest of 2025, there remains “significant uncertainty and downside risks in the global economy in the second half of 2025, given the lack of clarity over the tariff policies of the US”.
Market analysts also have attributed the current situation to the pause on US tariffs till August 2025.
However, Deputy Prime Minister (DPM) and Minister for Trade and Industry Gan Kim Yong, who visited the US in late-July, shared at the Institute of Policy Studies (IPS) and Singapore Business Federation (SBF) conference “Global-City Singapore: SG60 and Beyond” that the outlook is hard to predict.
In quotes reported by CNA, DPM Gan said his first question to US officials was whether they were open to negotiations on the 10% tariff that Singapore is subject to, and whether it could be reduced or removed.
“I think the answer for the time being was quite obvious — they are not in the mood to discuss any discount to the baseline tariff.”
“But we also want to put a place marker to remind (the US that) at any point in time, in future, if there’s flexibility to discuss the baseline tariff, we are interested in negotiating.”
He also asked officials if the baseline tariff will stay at 10%, or if it will go higher or lower.
“The answer was non-committal. They are still reviewing the tariff, and in time to come, they will make an appropriate announcement, so we just have to wait and see,” concluded DPM Gan.
