MOM: 3.2% real wage growth in 2024 as inflation eased

SINGAPORE: A report published by the Ministry of Manpower (MOM) on Wednesday (May 28) showed that wages in Singapore have continued to grow, having gone up by 5.6 per cent last year. In comparison, wages went up by 5.2 per cent in 2023. The MOM also noted that the labour market remained tight in 2024.

A tight labour market is characterised by a high demand for labour in relation to its supply, which means there are more job positions than workers available to fill them. A “loose labour market”, meanwhile, occurs when there are more workers than available positions.

With inflation easing, real wage growth rose quite a bit in 2024, 3.2 per cent compared to 0.4 per cent in 2023. Additionally, as the economy continued to grow last year, four in five (80.8 per cent) of establishments remained profitable. This number is slightly lower than the previous year, when 82.1 per cent of establishments were profitable.

The profitability of establishments varied across industries, with manufacturing seeing a rise in profitable firms, but real estate services, construction, and wholesale trade observed fewer profitable businesses.

Last year, 78.3 per cent of businesses continued to raise the salaries of their employees, in comparison to 2023, when 65.6 per cent of firms did so. The report from MOM notes, however, that most firms that raised employees’ salaries did so because of past organisational performance rather than forward-looking confidence.

Regarding wage growth, senior management saw a slightly smaller rate of increase (5.1 per cent) than rank and file (5.8 per cent) and junior management (5.6 per cent) employees. The report says that this is partly in reflection of endeavours to offset cost-of-living pressures.

Salary growth was seen last year across all industries, with Administrative & Support Services reporting the highest growth, 8.7 per cent. Financial Services (6.7 per cent) and Community, Social & Personal Services (5.7 per cent) also saw above-average increases amid continued demand for skilled workers.

However, workers in Food & Beverage Services (4.8 per cent), Wholesale Trade (4.2 per cent), and Manufacturing (5.1 per cent) saw below-average wage growth.

“Looking ahead, economic headwinds remain a key concern. With geopolitical tensions and global trade uncertainty persisting, business sentiments have softened. MOM’s forward-looking survey conducted in the first quarter of 2025 also indicated a decline in the share of firms planning to raise wages in the next three months. These developments point to a potential moderation in nominal wage growth in 2025, relative to 2024, particularly in trade-reliant sectors such as Manufacturing and Wholesale Trade,” the report added. /TISG

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