Geopolitical and economic uncertainty may impact job creation in Singapore for the remainder of 2025, economist says

SINGAPORE: Singapore’s employment growth slowed in the first quarter of 2025 (Q1 2025), with just 2,300 people added to the workforce. This was much lower than the 7,700 jobs created in the last quarter of 2024 and also below the 3,200 added during the first quarter of last year.

Callam Pickering, APAC senior economist at Indeed, said, “Singapore’s job market remains tight, but employment growth is showing signs of softening. Geopolitical and economic uncertainty may weigh upon the Singapore economy over the remainder of the year, impacting job creation.”

He explained that the latest numbers marked the weakest quarterly gain since the post-pandemic recovery began. In the March quarter, employment gains, excluding migrant domestic workers, were less than a third of the previous quarter’s gains and lower than the same period a year ago.

While employment dropped in industries such as professional services, manufacturing, and information and communications, it was offset by growth in healthcare and financial services. Mr Pickering noted, “Softer outcomes in export or outward-oriented sectors may be a taste of things to come – these industries are likely to be hit hardest by a US-led trade war.”

He also pointed out that an uncertain business environment, both regionally and globally, makes it difficult for Singapore businesses to plan ahead and assess their staffing needs. However, forward-looking measures of labour demand, such as job vacancies and Indeed job advertisements, remain elevated and should support employment growth in the near term.

Despite the rise in unemployment, Mr Pickering noted that labour market conditions in Singapore remain tight. The resident unemployment rate rose to 2.9% in the March quarter, up from 2.8% in December, while the citizen unemployment rate increased to 3.1% from 2.9%—figures which the Ministry of Manpower (MOM) described as “within the non-recessionary range”. Overall, unemployment stood at 2.1%, up from 1.9%.

Mr Pickering attributed the rise in unemployment to subdued employment growth, rather than retrenchments. “In fact, the retrenchment rate remains quite low, highlighting the ongoing resilience of Singapore’s business sector and overall economy,” he said.

According to MOM data, retrenchments fell to 3,300 in Q1 2025, down from 3,680 in the previous quarter. The retrenchment rate also remained low at 1.3 per 1,000 employees, a slight drop from 1.5 in the last quarter of 2024, with only a small proportion of retrenchments attributed to recession or downturn.

Mr Pickering added, “Singapore businesses are understandably more cautious and we are beginning to see that across a range of economic indicators. The economic outlook isn’t as strong as it was even a few months ago and that will weigh upon the hiring decisions of employers.”

He also pointed out that while Singapore’s labour market is still very tight, tighter than most countries, it is likely to loosen over the remainder of the year.

However, he noted, “We must also acknowledge that the Singapore and global economies are operating in an unusually uncertain environment and Singapore businesses will need to be nimble while managing those risks.” /TISG 

Read also: Singapore sees over 66% jump in flexible job postings compared to last year

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