The labour market is likely to soften further moving forward.
In the first quarter of 2025, Singapore's labour market offered a quiet but telling signal: the pace of job creation slowed sharply, and unemployment edged upward, as the city-state's deep exposure to global trade left it vulnerable to the gathering storm of tariff conflicts and dimming business confidence. The numbers are not yet alarming — retrenchments remain stable, and unemployment sits within historical norms — but they mark a visible turn in momentum for an economy that has long prided itself on resilience. What policymakers watch now is not the present, but the direction: whether caution among employers hardens into something more consequential, or whether calmer trade winds allow the labour market to find its footing once more.
- Job creation nearly ground to a halt in Q1 2025, with only 2,300 positions added — a 70% drop from the previous quarter — as global trade tensions chilled hiring across Singapore's outward-facing industries.
- Manufacturing, professional services, and information and communications all shed resident workers, while retail contracted after its seasonal year-end surge faded, leaving few sectors to absorb the slack.
- Unemployment climbed to 2.9% overall and 3.1% for Singaporeans specifically, with employer sentiment darkening: fewer companies now plan to hire or raise wages in the months ahead.
- Retrenchments, while still within non-recessionary bounds at 1.3 per 1,000 employees, were driven largely by business reorganisation — a sign of structural caution rather than outright collapse.
- The Ministry of Manpower has issued a frank warning: with global growth headwinds intensifying and trade war uncertainties unresolved, the labour market is likely to soften further before it stabilises.
Singapore's labour market is cooling. The first quarter of 2025 brought just 2,300 new jobs — a sharp drop from the 7,700 created in the final quarter of 2024 and below the 3,200 added in the same period a year earlier. The unemployment rate edged up to 2.9%, from 2.8% in December, marking the first visible strain on what had been a resilient employment landscape.
The Ministry of Manpower, releasing the figures on April 28, pointed to escalating global trade tensions as the primary cause. Singapore's outward-facing sectors bore the brunt: professional services, manufacturing, and information and communications all shed resident workers during the quarter. Retail also contracted as post-festive seasonal hiring wound down. Only health and social services and financial services managed to grow their resident workforces. Non-resident employment, concentrated in lower-skilled roles, provided a partial offset, but the overall mood was one of hesitation.
Retrenchments fell slightly to 3,300, or 1.3 per 1,000 employees — within the ministry's non-recessionary range — and were driven mostly by business reorganisation rather than industry-wide distress. But the numbers that concern policymakers most are forward-looking: fewer employers now expect to hire or raise wages over the next three months compared to their December outlook. The unemployment rate for Singaporeans specifically rose to 3.1% in March, up from 2.9% in December.
The current slowdown is not yet a crisis, but it is a clear shift in direction. For a city-state whose prosperity is tightly bound to global trade and financial flows, there is little shelter from external shocks. The central question now is whether employer caution deepens as trade conflicts persist, or whether easing tensions allow Singapore's labour market to regain its footing.
Singapore's labour market is cooling. In the first three months of 2025, the city-state added just 2,300 jobs—a sharp deceleration from the 7,700 positions created in the final quarter of 2024 and well below the 3,200 added in the same quarter a year earlier. The unemployment rate, meanwhile, crept up to 2.9 per cent, from 2.8 per cent in December, signalling the first visible strain on what has been a relatively resilient employment landscape.
The Ministry of Manpower, which released these figures on April 28, attributed the slowdown to a familiar culprit: the escalating trade tensions roiling global markets. As tariff threats and retaliatory measures mount between major economies, Singapore's outward-facing sectors have begun to feel the pressure. Professional services, manufacturing, and information and communications all shed resident workers during the quarter. Retail also contracted as the seasonal hiring surge that typically follows year-end festivities wound down. Only health and social services, along with financial services, managed to expand their payrolls among resident workers—Singaporeans and permanent residents combined.
Non-resident employment, driven almost entirely by lower-skilled work permit holders in administrative support and community services, provided some offset. But the overall picture is one of hesitation. For every thousand employees on the books, 1.3 were retrenched in the first quarter—down from 1.5 in the preceding three months and well within what the ministry considers a non-recessionary range. The total number of retrenchments fell to 3,300 from 3,680. Business reorganisation and restructuring, rather than industry collapse, accounted for most of these separations.
What worries policymakers more than the current numbers is the trajectory ahead. Employer sentiment has darkened noticeably. Fewer companies now expect to hire or raise wages over the next three months compared to their outlook in December. The ministry's own assessment is blunt: given the deepening uncertainties around global growth, the labour market is likely to soften further. The unemployment rate for Singaporeans specifically—a closely watched barometer of domestic economic health—climbed to 3.1 per cent in March from 2.9 per cent in December, though it held steady month-on-month from February.
The moderation in job creation and the uptick in joblessness directly mirror the deterioration in Singapore's economic outlook during the quarter. A city-state that depends heavily on trade and financial services has little insulation from global shocks. The current slowdown is not yet a crisis—unemployment remains well within historical norms, and retrenchments are stable rather than spiking—but it is a visible shift in momentum. As trade conflicts deepen and external demand weakens, Singapore's employers are pulling back. The question now is whether this caution will deepen into something more severe, or whether the labour market will stabilise as global tensions ease.
Notable Quotes
The labour market is likely to soften further moving forward, given greater uncertainties in external growth prospects.— Ministry of Manpower
The Hearth Conversation Another angle on the story
Why does a slowdown in Singapore matter beyond Singapore itself?
Because Singapore is a node in global trade networks. When hiring slows there, it signals that multinational companies are nervous about demand and growth prospects worldwide. It's an early warning system.
The numbers seem small—2,300 jobs. Is that actually significant?
In context, yes. The previous quarter added 7,700. So you're looking at a 70 per cent drop in momentum. For a city-state of 5.7 million people, that's a meaningful deceleration. And it happened in just one quarter.
What's the difference between residents and non-residents in these figures?
Residents are Singaporeans and permanent residents—the core workforce. Non-residents are work permit holders, mostly in lower-skilled roles. When resident employment slows but non-resident employment grows, it suggests companies are being selective about whom they keep and hire.
The ministry says the labour market is "likely to soften further." What does that mean in plain terms?
More job losses coming. Slower hiring. Possibly wage pressure easing. It's a cautious way of saying employers are bracing for tougher times ahead.
But retrenchments are actually down. Doesn't that contradict the warning?
Not really. Retrenchments are a lagging indicator—they happen when companies have already decided things are bad. The real signal is in hiring intentions. Employers are already saying they don't plan to hire or raise wages. The retrenchments will follow if conditions don't improve.
Which sectors are hurting most?
The outward-facing ones—manufacturing, professional services, information technology. Anything that depends on global demand or cross-border business. The sectors that are stable are domestic-facing: healthcare, social services, finance. That's the split.