Singapore Job Growth Slows, Unemployment Up

The first quarter of 2025 saw Singapore's economy grow by 3.9 per cent on a year-on-year basis, slightly exceeding initial government estimates. However, this represented a slowdown from the 5 per cent growth recorded in the preceding quarter of 2024. More critically, on a quarter-on-quarter seasonally adjusted basis, the economy contracted by 0.6 per cent, reversing the 0.5 per cent growth from the previous quarter. This contraction, even if milder than predicted, highlights a nascent deceleration in economic activity. The Ministry of Manpower (MOM) noted that businesses have largely adopted a "wait-and-see posture" in response to the evolving global trade landscape, which directly impacts their hiring and investment strategies. This cautious stance is reflected in the moderated job growth and the slight uptick in unemployment, as firms prioritize stability over aggressive expansion in an unpredictable environment.

The global economic outlook remains shrouded in uncertainty, despite some major economies having taken steps to de-escalate trade tensions. This fragile stability is underscored by the US's announcement of a 10 per cent blanket tariff on imports from countries, including Singapore, that have not retaliated against earlier US trade actions. While a 90-day pause on further tariff escalation was set to expire on July 8, 2025, the universal application of 10 per cent reciprocal tariffs remains in effect. Prime Minister Lawrence Wong articulated on April 4, 2025, that this move signifies a "seismic change in the global order," marking the end of rules-based globalization and free trade, ushering in a "more arbitrary, protectionist, and dangerous" phase. Singapore, with its heavy reliance on trade, is particularly vulnerable to these shifts and is expected to "take a bigger hit than others" if a full-blown global trade war materializes.

The impact of these trade dynamics is not uniform across sectors. The manufacturing sector, particularly its export exposure to the US market and slowing global end-markets, is expected to be adversely affected by US tariff measures. This includes electronics manufacturers like Venture Corporation, ST Engineering, and Flex, certain pharmaceuticals, and precision engineering. The electronics and semiconductor industries are particularly at risk due to US reshoring efforts, potentially leading to a downscaling of orders. However, the transport engineering cluster within manufacturing remains a "bright spot," driven by a shift towards aircraft maintenance, repair, and overhaul works. The slowdown in manufacturing, coupled with weaker global trade, is anticipated to weigh on trade-related services sectors, including wholesale trade, transportation, and storage, as demand for shipping and air cargo services softens. Similarly, growth in the finance and insurance sectors could be dampened by weaker trading activity, more tepid business activity, and lower consumer spending. Even consumer-facing sectors like retail trade and food and beverage services are likely to remain lackluster, partly due to locals spending abroad and an expected weakening of domestic labour market conditions. The Monetary Authority of Singapore (MAS) projects the economy to expand by 1–3% in 2025, a slowdown from 2024, largely stemming from these trade-related and modern services clusters.

The cautious sentiment among businesses is further evidenced by forward-looking polls conducted by MOM in April and May, after the US tariff announcement and subsequent 90-day pause. While there was a modest increase in hiring intentions, rising from 40.5 per cent of firms in Q1 2025 to 42.2 per cent for Q3 hiring plans, this was largely driven by the professional and financial services sectors. Hiring sentiment softened in most other sectors, indicating a selective approach to workforce expansion. Resident employment growth in Q1 2025 was a modest 300 jobs, concentrated mainly in health and social services, and financial and insurance services. Conversely, professional services and information and communications sectors saw a decline in resident employment. This mild increase in resident jobs is not surprising given Singapore's already high labour force participation and employment rates. Growth in non-resident jobs was primarily led by work permit holders in roles less likely to attract resident applicants, such as bus and truck drivers.

In response to these concerns, Singaporeans are adopting proactive financial strategies. The top three financial priorities identified are savings (62 per cent), maintaining a stable income (57 per cent), and building emergency funds (52 per cent). These priorities reflect a prudent approach to weathering potential economic shocks, emphasizing liquidity and financial buffers. Furthermore, insurance is increasingly recognized as a vital tool for financial stability, with 48 per cent viewing it as important for long-term planning. A notable 22 per cent of residents intend to allocate more funds to insurance in the coming year, while 27 per cent plan to increase their investment contributions, indicating a dual focus on protection and growth. To manage financial risks, 59 per cent of Singapore residents plan to cut back on daily expenses and major purchases, and 29 per cent intend to build emergency savings, demonstrating a tangible shift in consumption habits towards greater frugality.

The Central Provident Fund (CPF) system plays a crucial role in Singapore's personal finance landscape, acting as a built-in buffer for home financing and contributing to the overall risk management framework of the property market. For employed Singapore Citizens and Permanent Residents, CPF contributions are mandatory, automatically building savings for retirement, housing, and healthcare. However, if employment status changes or income is reduced, CPF contributions are directly impacted; for instance, individuals earning less than $750 a month will see reduced employee contributions, while those earning below $50 a month are exempt entirely. From 2024, buyers are required to maintain a minimum of $20,000 in their CPF Ordinary Account (OA) even after utilizing funds for housing. This mandatory minimum balance, which earns a guaranteed annual interest of 2.5 per cent, functions as a fallback reserve in situations where income might drop or emergencies arise, thereby reducing financial vulnerability. This safeguard, alongside strict borrowing criteria like Loan-to-Value (LTV) and Total Debt Servicing Ratio (TDSR) rules, encourages prudent financial planning and reduces the risk of defaults, contributing to the stability of Singapore's real estate market.

Collaboration with Institutes of Higher Learning (IHLs) is being intensified to offer more job counseling, internships, and job fairs, particularly for fresh graduates seeking a foothold in a shifting employment landscape. The government is also ramping up the pace of upskilling and retraining for mature workers. Special emphasis is placed on continuous learning and mid-career retraining, equipping workers with future-ready competencies through enhanced pathways for certification and greater access to subsidized courses. The SkillsFuture movement, launched in 2015, has expanded to over 28,000 courses, training more than 500,000 Singaporeans annually, with employer participation doubling from 12,000 companies in 2015 to 24,000 in 2024. This initiative aims to help Singaporeans secure better jobs and grow their careers, fostering a culture of lifelong learning. For example, SkillsFuture has been shown to offer a wage premium of up to 6% for trainees who engage in WSQ programs, alongside improved job placement rates, with nearly 7,000 individuals placed in 2019 and a 64% placement rate for those under 40.

The National Trades Union Congress (NTUC) plays a pivotal role in this ecosystem, with its Employment and Employability Institute (e2i) expanding its career and job services touchpoints from two to 27 in 2024. This expansion has significantly strengthened support for workers, leading to approximately 24,000 job placements between April and November 2024, a 70 per cent increase compared to the same period in 2023. The NTUC Job Security Council (JSC), managed by e2i, has successfully placed over 110,000 workers since its inception in February 2020, demonstrating its critical role during periods of flux. Beyond job matching, the JSC now supports companies in workforce and business transformation, aiming to enhance career mobility and alleviate anxieties over job and income insecurity. Success stories abound, with individuals like Raymond Tan securing new roles through e2i's channels, and others like Ms. Tan, Lawrence Seow, and Darryl Peter Jeret benefiting from personalized resume and interview coaching, with some transitioning into new fields through Career Conversion Programmes. Furthermore, e2i's AI-powered Virtual Career Coach (VCC) assists career coaches by consolidating job listings and skills upgrading courses, analyzing resumes, and identifying skills gaps to recommend relevant training. Since its roll-out in August 2024, over 3,000 jobseekers have benefited from the VCC, demonstrating its effectiveness in streamlining the job search and upskilling process.

The SkillsFuture Jobseeker Support Scheme offers temporary financial relief of up to $6,000 over six months for involuntarily unemployed individuals, helping them focus on finding new employment. To be eligible, a Singapore Citizen must be at least 21 years old, have had a past average gross monthly income of up to $5,000 in the past 12 months, and have lost their job due to involuntary reasons after being employed for at least six months out of the past 12. Participants earn points by engaging in supported job search activities, such as attending career coaching sessions, career fairs, or workshops, and can redeem cash payouts upon hitting monthly targets. This scheme provides a crucial safety net, allowing individuals to dedicate time to reskilling and job search efforts without immediate financial distress.

For Singaporeans, this means a reinforced commitment to prudent financial management. The emphasis on building emergency funds and increasing savings, as highlighted by recent surveys, is more critical than ever. Individuals should aim to build a financial buffer equivalent to at least six to twelve months of living expenses, providing a crucial safety net against potential income disruptions or unexpected costs. This extends beyond basic savings to include a strategic approach to debt management, particularly for housing loans. Leveraging the CPF Ordinary Account's built-in buffer and understanding its role in mitigating financial vulnerability in property ownership is essential. Homeowners with floating-rate loans should regularly review their packages with their banks or financial advisors, given the potential for interest rate fluctuations influenced by global economic conditions and the Monetary Authority of Singapore's exchange rate policy.

​The future economic landscape for Singapore will be characterized by ongoing geopolitical tensions and evolving trade rules. While the nation's strong reserves and cohesive approach provide a degree of resilience, individuals must internalize the need for proactive adaptation. This involves not only enhancing one's skill set to remain competitive in a dynamic job market but also diversifying income streams where possible and maintaining a flexible mindset towards career pathways. The collective effort of individuals embracing lifelong learning and prudent financial habits, supported by comprehensive national frameworks, will be paramount in ensuring Singaporeans' continued financial well-being amidst these complex global crosscurrents.