The Monetary Authority of Singapore (MAS) indicated that companies are likely to adopt a more cautious approach to hiring in 2026. Amidst growing global uncertainties stemming from the Middle East conflict, MAS projects that salary increments will also be smaller compared to the previous year. The overall business outlook has seen a slight softening, prompting MAS to forecast a slowdown in employment growth for 2026.
While non-resident employment growth is expected to adjust accordingly, resident employment is anticipated to remain supported by hiring within domestic-oriented and modern services sectors. Areas such as health and social services, public administration, and education continue to show structurally sound labor demand. Furthermore, unfilled vacancies for skilled professionals in technology and engineering persist due to rapid technological advancements.
MAS noted that companies in sectors heavily impacted by energy shocks might scale back hiring, but the overall market is expected to remain balanced. Nominal resident wage growth is projected to moderate in 2026 compared to 2025. Pre-announced pay raises and policy-driven increases, like those from the Progressive Wage Model, are expected to provide some support to average wages.
However, the central bank cautioned that a prolonged or deeper economic slowdown could negatively impact the labor market, potentially leading to more substantial cutbacks in hiring and an increase in retrenchments, alongside more pronounced moderation in wage growth. These projections follow a stronger second half of 2025 for Singapore's labor market, which saw total employment expand significantly, particularly with gains in non-resident construction workers.