SINGAPORE: More employers in Singapore are planning to raise employee wages in early 2026, after three straight quarters of decline in pay intentions.
A Ministry of Manpower (MOM) report found that 26.4% of firms intend to increase wages in the first quarter of 2026. The figure marks the first rebound after months of easing sentiment, according to data released on January 29, 2026.
The findings came from MOM’s advance estimates in its 2025 fourth-quarter Labour Market Report, released on Thursday. The labour market is expected to continue expanding, though employers remain cautious about hiring.
In addition, Lianhe Zaobao reports that employment has now increased for 17 consecutive quarters, while the unemployment rate has stayed low. These trends point to steady labour demand, even as firms take a measured approach to workforce growth.
Layoffs remain an area to watch. Total retrenchments in 2025 reached 14,400, slightly higher than the 13,020 recorded in 2024, MOM said.
In terms of hiring plans, 43.3% of firms said they intend to hire more workers over the next three months. This was slightly lower than 44.1% in September 2025. At the same time, the share of firms planning layoffs rose to 4.3%, up from 2.3% three months earlier.
OCBC chief economist Selena Ling also told Lianhe Zaobao that layoffs in global technology and financial services sectors remain visible, but described them as a normal adjustment in fast-growing industries. She said local construction projects continue to progress, while hospitality and financial services remain key sectors to monitor. She expects unemployment to stay “relatively stable”.
Singapore Management University economics dean Professor Li Jiahui cautioned that the rise in firms planning layoffs should not be ignored. He said the trend suggests companies are accelerating consolidation, even as the broader economy continues to grow.
He added that retrenchment risks could remain elevated this year. Artificial intelligence (AI) is reshaping jobs and wages, creating what he described as a new relationship between “layoff risk” and “salary growth”.
Professor Li said sectors such as financial services, information technology, legal consulting and quantitative analysis face pressure because core tasks can be automated. “This explains why hiring remains cautious despite strong growth,” he said, noting that firms are turning to “technology substitution” rather than expanding headcount to improve efficiency.
Singapore’s economy performed better than expected in 2025. Advance estimates from the Ministry of Trade and Industry showed 4.8% growth, above the earlier 1% to 3% forecast range, and slightly higher than 4.4% in 2024.
Prime Minister and Finance Minister Lawrence Wong is scheduled to deliver the 2026 Budget Statement on Feb 12, where more employment-related measures are expected.
The full 2025 fourth-quarter Labour Market Report will be released in mid-March. It will include data on job vacancies, labour movement and re-employment outcomes for retrenched residents.
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