Singapore’s total employment growth slows in Q1; job vacancies dip while retrenchments inch up

[SINGAPORE] Total employment growth in Singapore moderated in the first quarter of 2026, driven mainly by slower non-resident employment growth, data from the Ministry of Manpower’s (MOM) quarterly Labour Market Report released on Monday (Jun 15) showed.

The number of job vacancies fell slightly, led by non-PMET (professionals, managers, executives and technicians) roles. The number of retrenchments rose slightly, mostly in external-oriented sectors such as manufacturing.

At a company visit to Star Furniture, Minister for Manpower Tan See Leng acknowledged uncertainties from global developments and artificial intelligence.

But he added: “Even amid these uncertainties, there are some encouraging signs in the labour market.”

The minister highlighted that employment growth for residents rose sequentially, and overall retrenchment levels “remain within non-recessionary norms” despite a slight increase.

In its report, MOM said that the labour market continued to expand in Q1, alongside sustained economic growth, which was up 6 per cent year on year. But it warned that firms may become more cautious in hiring and raising salaries, given the current uncertainties and geopolitical tensions.

Excluding migrant domestic workers, Singapore’s total employment increased by 9,400 in its 18th straight quarter of growth. However, this marked a slowdown from the 17,700 growth in the preceding quarter.

The recent expansion in total employment was underpinned by stronger resident employment increases: 5,400 in Q1 2026, up from 3,100 in the previous quarter, MOM said.

Gains were led by administrative and support services, as well as transportation and storage.

SEE ALSO

Singapore employers willing to pay premium for AI skills amid softer hiring sentiment: survey

More retrenched white-collar workers in Singapore seeking unions’ help

Singapore’s ‘career bridges’ must be built before workers lose their footing

Singapore’s employment growth moderates in Q1 on seasonal factors, but labour market stays resilient

More

On the other hand, there were resident employment declines in the financial and insurance services sector. These were mostly among self-employed persons in the insurance and related services segment, even as employment by financial institutions, excluding self-employed persons, grew.

“Firms may be prioritising leaner but permanent headcount, while workers gravitate towards stability amid uncertainty,” MOM added.

Non-resident employment growth moderated, with expansion concentrated in construction and manufacturing.

Slight moves for vacancies, retrenchments

Job vacancies declined to 73,300 in March, recording a job vacancy rate of 2.9 per cent, though MOM maintained that labour demand remained firm.

“The number of job vacancies continued to exceed the number of unemployed persons at 1.46,” it added.

This was down from 77,700 in December 2025, or a job vacancy rate of 3.1 per cent, and was also lower than the corresponding year-ago period’s 80,100. MOM attributed the decline to fewer non-PMET vacancies.

It said it observed increases in job vacancies in financial services and manufacturing, as well as higher demand for skilled workers, with more vacancies for PMEs and PMETs.

Meanwhile, the number of retrenchments picked up slightly in the latest quarter to 3,830 (1.6 per 1,000 employees), up from Q4 2025’s 3,690 (1.5 per 1,000 employees).

Still, Dr Tan said the incidence of retrenchment remained low.

External-oriented sectors such as manufacturing, financial services and professional services were the hardest hit, MOM said, adding that retrenchments were largely driven by restructuring or reorganisation, rather than cost-cutting.

By educational qualification, degree holders recorded the highest retrenchment incidence among all qualification groups, at 3.1 per 1,000 employees, rising sharply from 2.6 per 1,000 resident employees.

The ministry said this suggests that restructuring activity in Q1 remained concentrated among higher-educated workers, reflecting ongoing restructuring in professional and knowledge-intensive sectors.

Dr Tan added: “Retrenchment is never easy, but what encourages me is that we are seeing more retrenched workers finding their way back to employment quicker.”

The report showed that the resident rate of re-entry into employment six months after retrenchment rose for the second straight quarter. It was up at 60.7 per cent in Q1, from 57.4 per cent in the fourth quarter of 2025.

The number of employees placed on short work-week or temporary layoff also grew in Q1 2026, reaching the highest since Q4 2021.

The ministry said that with “retrenchment levels remaining low and vacancies robust”, this uptrend “reflects firms’ increased use of reduced working hours to absorb temporary changes in manpower demand rather than retrench workers”.

Unemployment rate holds steady

In March, unemployment rates stayed low and stable, with the overall rate holding at 2 per cent compared with December.

The resident unemployment rate also remained the same, at 2.9 per cent, whereas the citizen unemployment rate ticked up to 3.1 per cent in March, from 3 per cent in December.

MOM noted that, for residents below 30, the unemployment rate rose to 6.2 per cent in March, from 5.8 per cent previously. But their long-term unemployment rate stabilised over the quarter at 1.5 per cent in March.

“The increase in unemployment rate, seen among youths aged below 25, likely reflects more frequent moves between short-term vacation jobs rather than a broad-based lack of job opportunities,” it observed.

The unemployment rate among older workers aged 60 and above was relatively low, and the rate for those in the “core working-age bands of 30 to 59” remained largely stable quarter on quarter, said the ministry.

“These patterns indicate that recent changes in unemployment are more driven by developments among those younger.”

Holding steady at 0.9 per cent in March, the resident long-term unemployment rate indicated continued stability in job prospects.

The AI era

For the first time, the quarterly report included discussion on the impact of AI on the labour market, citing the results of an earlier MOM survey.

“AI adoption is beginning to shape labour market adjustments, but its impact so far appears to be greater on how jobs are performed than on whether jobs continue to exist,” it said.

Dr Tan highlighted that firms were three times more likely to redesign jobs and work processes than reduce headcount or hiring because of AI.

MOM said that labour market conditions are expected to remain resilient. But it warned that firms may adopt a more cautious approach in hiring and wage increases, amid heightened global economic uncertainties and geopolitical tensions.

“Labour demand is likely to moderate if external conditions weaken further and elevated global input costs persist,” it concluded.