In the first quarter of 2024, Singapore’s employment growth moderated, as early data from the Ministry of Manpower (MOM) revealed an increase of only 4,900 jobs—down from 7,500 in the previous quarter. This growth primarily stemmed from an increase in resident employment, as non-resident employment saw its first contraction since Q3 2021, largely attributed to cooling labor demand in the construction sector.

The decline in non-resident employment was significantly influenced by a drop in the number of work permit holders in construction, which traditionally drives non-resident employment growth. The construction sector’s employment fell for the first time since Q4 2021 due to a reduction in the sector’s dependency ratio ceiling (DRC) to 1:5 from 1:7, effective January 1, 2024. The DRC determines the maximum ratio of S Pass and work permit holders that a company can employ relative to its total workforce.

While construction experienced declines, there were also smaller decreases in other sectors, including manufacturing and information and communications. Economist Chua Han Teng from DBS noted that while manufacturing saw a decrease in retrenchments, overall employment data remained weak, likely due to global uncertainties affecting hiring.

Retrenchments in Singapore have fallen for the second consecutive quarter, with 3,000 layoffs reported in Q1, down from 3,460 in the previous quarter. Despite this easing, unemployment rates edged up slightly in March, with overall unemployment rising to 2.1% from 2.0% in February. Citizen unemployment increased to 3.1%, while resident unemployment rose to 3.0%.

MOM indicated that it does not expect sustained increases in unemployment rates, citing continued labor market tightness. A forward-looking poll showed that more firms plan to hire in the upcoming months, with 50.7% of businesses expressing intent to hire, up from 47.7% in the previous survey. However, the outlook for wage increases appears cautious, with only 26.1% of firms planning to raise wages, down from 32.6% previously.

The full report detailing the labor market’s performance in Q1 is set to be released in mid-June.