Why Does Singapore Job Market Feels Bad

The paradox deepens when observing the labour market's vital signs. The seasonally adjusted unemployment rate for the second quarter of 2025 edged up to 2.1 per cent, the highest in a year, while the resident unemployment rate stood at 2.9 per cent in June. Although these figures remain within non-recessionary ranges, the slowdown in employment growth—from 7,700 jobs added in the last quarter of 2024 to just 2,300 in the first quarter of 2025—signals a significant loss of momentum. It is this deceleration, rather than a full-blown crisis, that fuels the underlying unease.

Compounding this is the persistent pressure of a high cost of living, even as inflation shows signs of easing. The annual inflation rate has moderated, hitting a low of 0.6% in July 2025. However, core inflation, which excludes private transport and housing, is still projected to average between 1.0% and 2.0% for the year, ensuring that household budgets remain tight. This environment, where job security feels increasingly fragile and wage growth expectations are tempered, creates a potent sense of financial vulnerability, leaving many to wonder why the economic reality on the ground feels so disconnected from the nation's broader economic narrative.

Leading the charge is the transport, logistics, and automotive industry, which recorded a blistering net employment outlook of 48 per cent for the fourth quarter of 2025. This figure, the second-highest globally in its category, showcases the immense strength of Singapore's position as a strategic logistics hub. Following closely is the healthcare and life sciences sector, with a strong outlook of 38 per cent. These industries, along with communication services, are the only ones to surpass their respective global averages, creating concentrated pockets of opportunity. Employment growth in financial services also continues to expand, demonstrating resilience amidst the uncertainty.

In sharp contrast, several key sectors are facing a significant downturn in hiring sentiment. The information technology sector has seen its outlook plunge, driven by emerging concerns that advancements in artificial intelligence are beginning to undercut the demand for entry-level hires. Outward-oriented sectors like professional services and manufacturing have also registered declines in employment, feeling the direct impact of persistent global economic uncertainty and shifts in international trade dynamics. Rounding out the bottom are consumer goods and services and the finance and real estate sectors, with muted outlooks of 12 per cent and 10 per cent respectively, reflecting subdued consumer-facing activity and a more cautious approach from firms.

This defensive posture is reshaping hiring strategies across the board. Nearly half of all employers polled plan to maintain their current staffing levels, expressing confidence that their existing teams can meet business goals while they adopt a "wait-and-see" approach. This trend indicates a pivot from aggressive expansion to a focus on operational efficiency and stability. Furthermore, there is a clear and growing reliance on flexible talent, with more than one in three employers increasing their use of contract and part-time staff in 2025, a figure that has more than doubled from the previous year.

The engine of this caution is a confluence of rising operational costs—particularly in labour, energy, and financing—and growing uncertainty in customer demand. About one in four businesses reports facing a credit crunch, a significant challenge that restricts their ability to invest and expand. While some sectors like banking, insurance, and education remain relatively optimistic, the overarching mood is one of prudence, creating a tougher, more competitive environment for those seeking new roles or career advancement.

The financial strain is palpable and directly impacts mental well-being, creating a vicious cycle of stress and insecurity. Over 80% of adults in Singapore report feeling stressed, a rate higher than the global average, with the rising cost of living and uncertainty about the future being the primary drivers. This financial anxiety has tangible consequences; workers without emergency savings are over three times more likely to report diagnoses of anxiety or depression.The result is a workforce where nearly a third of individuals are at a high mental health risk, leading to significant productivity losses and a diminished sense of overall well-being.

In response to this instability, many are turning to alternative work arrangements to regain a sense of control over their financial lives. The gig economy is no longer a niche but a mainstream phenomenon, with the number of platform workers surging by 21% in recent years to constitute 3.6% of the total labor force. This move towards flexible, on-demand work is driven by a desire for diversified income streams and greater autonomy. The rise of hybrid models and the increasing acceptance of freelance professionals in sectors from IT to healthcare underscore a permanent shift in how work is structured, forcing individuals to become more adaptable and entrepreneurial in managing their careers.

The most effective strategy in this environment is to align personal development with the clear growth trajectories visible in the market. Reskilling should not be a generic pursuit but a targeted one. For those in sectors with a weakening outlook, this may mean exploring career conversion programs that provide a bridge into resilient industries like healthcare or logistics. For those already in high-demand fields, the focus must be on continuous upskilling to stay ahead of technological advancements and maintain a competitive edge. The government's emphasis on initiatives like the SkillsFuture Workforce Development Grant underscores the national priority of building a workforce that can adapt to these structural changes.

​Beyond technical skills, the current climate places a premium on adaptability and strategic career planning. With nearly one in three professionals considering a job change, the market is fluid, but employers are highly discerning, seeking specialized talent to drive growth. This means job seekers must be prepared to articulate a clear value proposition, demonstrating not just competence but also a deep understanding of the challenges and opportunities facing their target industry. The most resilient individuals will be those who treat their careers as a business, actively monitoring market trends, investing in relevant skills, and positioning themselves for the opportunities that emerge from the disruption.