SINGAPORE'S population growth has fallen to its lowest rate in a decade - the latest data point to a demographic shift that businesses ought to pay attention to. The government said yesterday that the total number of people living in Singapore grew just 1.3 per cent from June 2013 to June this year, down from 1.6 per cent the previous year. This means that Singapore's population is now growing at less than half the annual growth rate of 3.5 per cent between 2005 and 2010. Attributing this to policy moves to curb the inflow of workers from abroad, the National Population and Talent Division's (NPTD) report yesterday said that the foreign workforce here grew just 3 per cent, down from 5.9 per cent the year before, and modest compared to growth of 8.1 per cent in the 2011-2012 year. Without a doubt, the successive rounds of levy hikes and tightened quotas, aimed at weaning Singapore's businesses off cheaper foreign manpower and spurring higher productivity, have been keenly felt by businesses.

Heftier levies and the need to pay more to hire Singaporeans have pushed wage bills up. Unit labour cost, which jumped 4 per cent in Q2 this year after rising 2.3 per cent in the first quarter, has been climbing upwards over the last two years. Signs that businesses aren't able to stomach all the extra costs were also evident in the August inflation report released this week. Again, rising costs stemming from the tight labour market were highlighted as a primary source of inflation for the rest of this year. In fact, NPTD saw fit to address the business challenge implied by its numbers, in what was an otherwise statistics-focused report. "Going forward, businesses will face a tight labour market as we restructure the economy. Nonetheless, Singapore remains business friendly, and we will help businesses to grow and succeed here, to create quality jobs for Singaporeans."

But beyond wage costs and manpower shortages, any business which has Singapore as its primary market may also have to contend with slowing demand growth in the future. There were fewer Singaporean births compared to a year ago, so though the citizen population grew at the same pace of 0.9 per cent as it did last year, this was propped up by immigration. The total fertility rate of residents has fallen further below replacement to 1.19. Making matters worse, Singapore's population continues to age. Citizens above the age of 65 now make up 12.4 per cent of the population, up from 11.7 per cent in 2013. At the same time, the number of prime work-age residents supporting each elderly person has fallen - to six from 6.4 last year.