Labour market expansion slows in Q1 amidst cooling hiring plans

Employment rose for 18th quarter whilst hiring plans fall sharply.

Singapore’s labour market expansion slowed in the first quarter (Q1) of 2026 as hiring and wage expectations fell, even as employment rose for the 18th consecutive quarter, according to the Ministry of Manpower (MOM).

Total employment increased by 5,000 in Q1 2026, up from 2,300 a year earlier but down from 17,700 in the fourth quarter (Q4) of 2025, reflecting seasonal effects and a higher base in the previous quarter.

Employment grew for both residents and non-residents. Resident job gains came mainly from transportation and storage, and administrative and support services, whilst non-resident employment continued to rise in construction, albeit at a slower pace than in the previous quarter.

Unemployment remained broadly stable, standing at 2.1% in March 2026, compared with 2.0% in December 2025. The resident rate was 2.9%, whilst the citizen rate was 3.1%.

Retrenchments stayed low at 1.5 per 1,000 employees, unchanged from the previous quarter, totalling 3,700, similar to 3,690 in Q4 2025. Most retrenchments resulted from business reorganisation or restructuring.

Hiring and wage expectations weakened. The share of firms expecting to hire in the next three months fell from 54.6% in February 2026 to 44.6% in March 2026. The share of firms expecting to raise wages declined from 39.3% to 25.4% over the same period.

MOM said firms showed caution amidst economic uncertainty linked to geopolitical tensions. It noted early signs of stabilisation in April, whilst expectations remained below February levels.

For the second quarter of 2026, the labour market is expected to remain tight and continue to expand, although at a more measured pace if external conditions weaken.

The ministry said employers and workers should focus on workforce transformation and skills upgrading.

It highlighted existing schemes such as Career Conversion Programmes, the Mid-Career Pathways Programme, and the SkillsFuture Workforce Development Grant (Job Redesign+), which provides funding support of up to 70% of project costs, capped at $150,000 per enterprise.

MOM also pointed to Career Health SG, SkillsFuture Credit, the GRaduate Industry Traineeships programme for fresh graduates, and the SkillsFuture Jobseeker Support scheme, which provides temporary financial support of up to $6,000 over six months for eligible unemployed individuals engaged in active job search.